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HMRC Postpones Phase 2 Making Tax Digital until April 2021

April 1 2020, was meant to be the date that HMRC launched phase II of making Tax Digital across the UK. However, due to COVID-19, they have made the decision to postpone the roll-out by one year to April 1 2021.

This means that businesses will have until their first VAT return period starting on or after 1 April 2021 to put digital links in place.

In their communication, HMRC acknowledged that COVID-19 has presented UK businesses with unprecedented challenges. Therefore HMRC is allowing all MTD businesses more time to put in place digital links across all parts of their accounting process and compatible software.

About Making Tax Digital Phase 2: 

MTD Phase 2 dictates that all manual involvement in the VAT return filing process ceases and the flow of data from the accounting system to HMRC must be completely digital. The so-called digital journey of this data can be made using Digital Links. Ultimately, it means no one should be copying and pasting data – it should all be completely automated.

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