Key facts
- A digital link is an electronic transfer of data with no manual re-keying.
- Copy-and-paste counts as a digital link; re-typing figures does not.
- Bridging software connects your spreadsheets to HMRC’s MTD system.
- The digital links requirement has been fully enforced since April 2021.
How Digital Links Work in MTD for VAT
A digital link is an electronic transfer of data between software programs, products, or applications. The key rule: no one should manually re-type or re-key data at any point in the chain from records to submission.[1]
What Counts as a Digital Link?
| Method | Digital Link? |
|---|---|
| Linked cells in a spreadsheet | Yes |
| Copy-and-paste between spreadsheets | Yes |
| CSV/XML export and import | Yes |
| API connection between software | Yes |
| Emailing a spreadsheet and importing it | Yes |
| Re-typing figures from a screen or printout | No |
| Manually entering figures from memory | No |
What Is Bridging Software?
Bridging software is a tool that takes your VAT Return figures (usually from a spreadsheet) and submits them to HMRC via the MTD API. It “bridges” the gap between your existing record-keeping and HMRC’s digital submission requirement.[3]
How Bridging Software Works
- You keep your VAT records in a spreadsheet (Excel, Google Sheets, etc.)
- The spreadsheet calculates your 9-box VAT Return figures
- The bridging software reads these figures (via a digital link)
- You review and submit to HMRC through the bridging software
GoFile works as bridging software. Enter your 9-box figures (or import from a spreadsheet) and submit directly to HMRC. Try it free.
Using Spreadsheets Under MTD
You can still use spreadsheets for VAT record-keeping under MTD, provided:
- The spreadsheet contains all required digital records
- Data flows from the spreadsheet to your filing software via a digital link
- No figures are manually re-typed at any stage
What If You Don’t Have Digital Links?
HMRC can issue penalties for failure to comply with MTD requirements. If you’re found to be manually re-keying data, you could face a penalty for non-compliance with digital record-keeping obligations.
Frequently Asked Questions
What is a digital link for MTD VAT?
A digital link is an electronic transfer of data between software programs with no manual re-keying. Examples include linked spreadsheet cells, copy-and-paste, CSV/XML imports, and API connections.
Does copy-and-paste count as a digital link?
Yes. HMRC accepts copy-and-paste between spreadsheets or applications as a valid digital link. However, re-typing figures from a screen or printout does not count.
What is bridging software for MTD VAT?
Bridging software takes your VAT Return figures from a spreadsheet and submits them to HMRC via the MTD API. It bridges the gap between your existing record-keeping and HMRC’s digital submission requirement.
When did the digital links requirement come into force?
The digital links requirement has been fully enforced since April 2021. All data transfers in the VAT record-keeping chain must now be digital — no manual re-keying is permitted.
Further Reading
- MTD VAT Compatible Software
- VAT Records You Must Keep
- What Is MTD for VAT?
- Filing a VAT Return via MTD
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Sources
- Making Tax Digital for VAT — GOV.UK
- Use of digital links in MTD for VAT — GOV.UK
- Find software for MTD for VAT — GOV.UK