Digital Links: A guide to MTD in 2021
Date published
February 24, 2021
Company
Tax Systems
The first phase of Making Tax Digital (MTD) saw the requirement for the digital
submission of the VAT Return using compliant software. That’s now behind us but
2021 brings new challenges. Under Phase 2, businesses that exceed the £85,000
threshold will need to have digital records and digital links in place to create an
automated end-to-end VAT process. Achieving this is likely to be more complex and
there are a number of ways in which the business can comply, necessitating the
evaluation of the options in the light of what the business hopes to achieve.
In this report we:
- Summarise HMRC’s objectives under MTD
- Look at the success of the rollout to date and attitudes in the market
- Consider the implications of the pandemic
- Explore the opportunities for you to make MTD contribute to the business
- Review the requirements under Phase 2
- Examine the strengths and weaknesses of the four main compliance choices
- Identify the things to watch out for including:
– Penalties and the implications of the end of the soft landing period
– Data collection and data quality
– Amendments and adjustments
– Errors and the risk of non-compliance
– Managing the process
– Future change
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