HMRC have announced that any businesses needing to update particularly complicated or legacy IT systems can apply for an extension to the 2020 deadlines for complying with the digital links requirements under Making Tax Digital for VAT (MVD) .

For VAT periods commencing on or after 1 April 2020 (or 1 October 2020 for deferred businesses) systems must use digital links for any transfer or exchange of data between software programs, products or applications which are used as functional compatible software. 

HMRC now recognises that some businesses have complex or legacy IT systems (which have been taken over as part of a business acquisition) and may require more time to put digital links in place.

Subject to meeting certain conditions, these businesses can apply for additional time (on top of the one year ‘soft landing’ period to April/October 2020) to enable them to get the necessary links set up.

If postponement is granted this will be given by way of a specific direction; cost alone will not be a good enough reason and HMRC will only issue a direction in exceptional circumstances.


To be considered for a specific direction, you will need to:

  • Make a formal application to HMRC as soon as possible and no later than the end of your soft landing period.
  • Explain why it is not achievable or reasonable for you to have digital links in place by your MVD digital links date (April 2020 or October 2020, for businesses mandated to join in 2019) What is unachievable and not reasonable will depend on your individual circumstances. The HMRC guidance in  provides examples of this.
  • Submit details of the systems that cannot be digitally linked (provide a current map of your existing VAT systems, highlighting the exact areas that cannot be linked).
  • Provide a clear explanation and timetable for when and how you will become fully MTD compliant (ideally no later than one year from the end of your soft landing period).
  • State the controls you will put in place to ensure any manually transferred data is moved accurately.

How to apply

If you need to apply for an extension you should email This email address is being protected from spambots. You need JavaScript enabled to view it. to request an application form, including your business name and VAT Registration number. If you have an allocated Customer Compliance Manager you should request a form directly from them.

  • A specific officer will be allocated to review the application.
  • Where it is not considered appropriate to issue a direction, HMRC will let you know why.
  • All applications will be considered on a case-by-case basis.
  • In the meantime, you should ensure you progress your plans to become digitally linked while you wait for HMRC to formally respond.

Links to our guides:

Making Tax Digital: VAT (subscriber guide)

MVD: functional compatible software

Making Tax Digital (for VAT) tool: who has to join?

External link:

VAT notice 700/22