Digital Links & Digital Records

Key facts

Digital records are electronic records of your transactions maintained in software or a digitally-linked spreadsheet.
Digital links are electronic transfers of data between software programs — no manual re-keying or copy-and-paste.
The digital links requirement has been mandatory since 1 April 2020 for MTD for VAT.
Acceptable digital links include automated data transfer, API connections, CSV/XML imports, and linked spreadsheet cells.
Manual re-keying of data between systems is not permitted under MTD.

What Are Digital Records?

Under Making Tax Digital, you must keep your business records in a digital format. This means the information about your transactions must be stored electronically — in MTD-compatible software, a spreadsheet, or a combination of systems connected by digital links.^[1]

Digital records are not the same as scanned paper receipts or photographed invoices. The key requirement is that the data (dates, amounts, categories, VAT rates) is held in a structured, electronic form that can be processed by software.

What Must Be Recorded Digitally?

For MTD for VAT, the following must be maintained as digital records:^[1]

Category	What to Record
Business details	Business name, principal place of business, VAT registration number, VAT accounting scheme
Supplies made (sales)	Date, net value (excluding VAT), and VAT rate for each supply
Supplies received (purchases)	Date, net value (excluding VAT), and VAT rate for each supply received
VAT account	Output VAT owed, input VAT reclaimable, any adjustments, and the net amount payable/refundable

For MTD for Income Tax (ITSA), you must keep digital records of all business income and expenses with the date, amount, and category for each transaction.

Note: You do not need to digitise every invoice or receipt. The data (date, amount, category, VAT rate) must be digital, but the source documents can remain on paper. However, you should keep source documents in case HMRC asks to see them.

What Are Digital Links?

A digital link is an electronic or automated transfer of data between one software program and another, or between a software program and a spreadsheet. The purpose is to ensure that data moves between systems without manual re-entry.^[1]

Digital links are required whenever data passes from one part of your record-keeping system to another. For example:

From your accounting software to your MTD filing software
From a spreadsheet to bridging software
From one spreadsheet workbook to another
From a point-of-sale system to your accounting software

Acceptable Digital Links

HMRC accepts the following as valid digital links:^[1]

Automated data transfer between software via APIs or built-in integrations
CSV or XML file import/export — exporting data from one system and importing it into another
Linked spreadsheet cells — formulas that reference cells in another workbook or worksheet
Email attachments that are imported directly into software without manual re-entry
Database queries that pull data from one system into another

What Is NOT a Digital Link

The following are not acceptable as digital links under MTD:^[1]

Manual re-keying — typing figures from one system into another by reading them from the screen
Copy-and-paste — copying values from one software program and pasting them into another
Reading and entering — looking at figures on a printed report and entering them into software

Warning: Copy-and-paste between software programs is not a digital link, even though it feels digital. HMRC specifically states that copy-and-paste between applications does not meet the digital link requirement. Within a single spreadsheet workbook, cut/copy/paste is acceptable — but not between separate software programs.

Using Spreadsheets with MTD

You can use spreadsheets as part of your MTD record-keeping, provided:^[1]

The spreadsheet holds your digital records (transactions, dates, amounts, categories)
Data is transferred to your filing software via a digital link (e.g. CSV export/import, API, or linked cells)
There is no manual re-keying at any point in the chain

Common Spreadsheet Setups

Setup	Compliant?	How It Works
Spreadsheet + bridging software (CSV import)	Yes	Export figures from spreadsheet as CSV; bridging software imports and files to HMRC.
Spreadsheet with linked cells to another workbook	Yes	Summary sheet pulls totals from transaction workbook via cell references.
Spreadsheet + manual re-keying into filing software	No	Typing figures from a spreadsheet into filing software breaks the digital link.

While spreadsheets are permitted, using end-to-end MTD software like GoFile is simpler because everything — records, calculations, and filing — is handled in one place with no linking required.

Digital Records for MTD ITSA

For MTD for Income Tax Self Assessment, the digital record-keeping requirements are similar in principle but tailored to income tax:^[3]

The date of each business transaction
The amount of income or expense
The category of income or expense (matching the Self Assessment categories)

These records feed into your quarterly updates and final declaration. HMRC-recognised software such as GoFile’s Income Tax filing software keeps these records and submits your updates in one place.

Tip: If you currently use a spreadsheet for your bookkeeping, the simplest migration path is to switch to MTD-compatible software that imports your existing data. GoFile can get you up and running quickly — try it free.

Frequently Asked Questions

What is a digital link?

A digital link is an electronic or automated transfer of data between software programs or between a software program and a spreadsheet. It ensures that data flows between systems without being manually re-typed, reducing the risk of transcription errors.

Can I still use spreadsheets under MTD?

Yes, but with conditions. You can use spreadsheets to record transactions, but the data must be transferred to your filing software via a digital link (e.g. a CSV import, API, or linked cells). You cannot manually type figures from a spreadsheet into your filing software.

What counts as a digital link?

HMRC accepts: automated data transfers between software, API connections, CSV or XML file imports/exports, linked cells in spreadsheets that pull data from other workbooks, and email attachments that are imported without manual re-entry.

What is NOT a digital link?

Manual re-keying (typing figures from one system into another), copy-and-paste between software programs, and reading figures from a screen and entering them into another program are all not acceptable digital links under MTD.

Sources

VAT Notice 700/22: Making Tax Digital for VAT — HMRC
Making Tax Digital for VAT — GOV.UK
Overview of Making Tax Digital — GOV.UK