On 17 September 2026, HM Revenue & Customs (HMRC) published a tranche of updates to its Making Tax Digital (MTD) guidance manuals (VATMTD, ITMTD), focusing on practical implementation issues for agents and software developers. Key additions include: clarified requirements for ‘digital links’ between spreadsheets and MTD-compatible software (confirming that API-based connections satisfy the legislative requirement); expanded exemptions guidance for digitally excluded taxpayers, now including a statutory declaration form (MTD-EX1) for those unable to use digital tools due to age, disability, or location; and a new appeals process for MTD late submission penalties, introducing a ‘first breach’ warning letter before financial penalties accrue.
Key Takeaways
- Spreadsheet Bridging Legitimized: The guidance explicitly confirms that using API ‘add-ins’ or macros to push data from Excel to MTD software constitutes a valid digital link, ending a long-standing grey area for the 400,000+ businesses using spreadsheet-based records.
- Exemption Process Formalized: The new MTD-EX1 form must be submitted via the agent’s online account or by post; HMRC commits to a 15-day decision turnaround. Exemptions are granted for up to 3 years, renewable.
- Penalty Appeal Structure: The new ‘warning letter’ stage applies only to the first late submission in a rolling 24-month period; subsequent failures incur immediate penalties (£200 for VAT, £100 for ITSA), with appeal rights to the First-tier Tribunal.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement