What is a Digital Link?
30-second answer
A digital link is the electronic (or digital) movement of information from one place to another without manually re-entering the data.
For Making Tax Digital, HMRC requires sole traders and landlords to keep digital records and ensure those records form part of a digital process.
In practice, that means there should be a clear digital link between the transactions you record and the figures submitted to HMRC.
If you use spreadsheets, there's a good chance you're already using digital links without realising it. Spreadsheet formulas, linked totals and spreadsheet uploads can all form part of a digitally linked process.
This guide is most relevant if you are:
- A sole trader or landlord
- Currently using spreadsheets
- Interested in how MTD works
- Trying to understand digital links
This guide covers
This guide is provided for general information only and is based on HMRC guidance available at the time of writing.
HMRC requires sole traders and landlords using Making Tax Digital to keep digital records of their income and expenses. HMRC also requires those records to form part of a digital process.
In practice, that means the figures used for submissions should be digitally linked back to the records they came from, rather than being manually retyped along the way.
The purpose is to create a clear digital trail from the original transaction through to the figures submitted to HMRC.
In short
A digital link is about how figures move between records and systems.
A digital link is simply a way of moving information from one place to another digitally, without manually typing the same figures out again.
For Making Tax Digital, the important point is that figures should move through a digital process linking the records you keep to the software used to submit information to HMRC.
In short
A digital link is about transferring information digitally, not manually re-entering figures.
Digital links create a clear digital path between the records you keep and the information submitted to HMRC.
This matters because Making Tax Digital is not just about submitting information online. It is about keeping digital records and using software that links with HMRC's Making Tax Digital systems.
Depending on how your records are maintained, digital links may involve one or more of the following:
- Spreadsheet formulas and/or uploads
- Bookkeeping software
- File imports and exports
- Automated transfers
- APIs, which are essentially a digital postie carrying information between software systems
In short
Digital links show how the figures in your MTD submission came from the transaction records you keep.
Digital records and digital links are related, but they are not the same thing.
Digital records
Digital records are the electronic transaction records you keep for income and expenses.
Digital links
Digital links are how the information moves between records, spreadsheets and software.
HMRC gives several examples of ways records can be digitally linked.
A formula in one part of your spreadsheet can pull a value from another part of your spreadsheet.
For example, an Overview sheet may use formulas to link cells and pull totals from individual income and expense sheets.
Information can be exported from one system as a CSV file and imported into another software product without manually retyping the figures.
A CSV (Comma-Separated Values) file is a simple file format that stores information in rows and columns, making it easy to move data between spreadsheets and software
A spreadsheet or file containing digital records can be uploaded into software that reads the information and prepares the relevant submission.
Some systems transfer data automatically or use APIs to move information between software products.
API stands for Application Programming Interface. Think of it as a digital postie that carries information between different software systems so they can automatically work together.
The main thing to avoid is manually retyping figures from one place into another when those figures should move digitally.
If totals are calculated in one system and then typed manually into another system for submission, that is not a digital link.
Copying and pasting should also be avoided as it does not create a clear digital link between the source records and the submitted figures.
In short
A digital link is about transferring information digitally, not manually re-entering figures.
If you use a full accounting package, much of the digital link process happens behind the scenes without you ever needing to think about it.
If you use spreadsheets, it's helpful to understand the basics so you know how figures move from your records into the software used for submission.
If HMRC ever asks how a submission was created, you should be able to explain where the figures came from and how they were transferred.
In short
You don't need to be a digital links expert, but it helps to understand how your records connect to your submission in case HMRC should ever ask.
Digital links are especially important for spreadsheet users because many people keep their records in Excel or Google Sheets and then use separate bridging software to submit information to HMRC.
A spreadsheet-based MTD digitally linked process may include:
- Income and expense sheets
- Linked formulas that calculate totals
- An Overview sheet that pulls figures into one place
- A spreadsheet upload into compatible software
- A review step before submission
The exact process depends on the software being used.
In short
The goal is to make sure your spreadsheet records can link into a digital submission process.
suiteSheets is MTD-compatible bridging software designed for sole traders and landlords who prefer a spreadsheet-based approach to Making Tax Digital.
Instead of moving everything into a bookkeeping platform, you can work with a full suiteSheets template or simply add the Overview sheet to your existing spreadsheet.
suiteSheets templates are designed for simple, practical record-keeping and work in both Excel and Google Sheets.
When a submission is due, you simply upload your spreadsheet to your suiteSheets account. Our system reads the totals directly from your Overview sheet, shows them clearly on screen, and asks you to confirm that everything looks correct. Once you're happy, you can submit the figures straight to HMRC.
Full suiteSheets template
Ideal if you want a clean, fresh start to your record keeping.
- Income and expense sheets
- Overview sheet built in - figures calculate automatically
- Quarterly profit/loss totals ready to review and submit
- Works in Excel and Google Sheets
- HMRC recognised categories
Overview sheet only
Ideal if you have a spreadsheet set up and want to keep it.
- Simply add our Overview sheet to your current spreadsheet
- Input a simple formula to link your existing totals
- Works in Excel and Google Sheets
- HMRC recognised categories
A digital link is a digital transfer of information between records, spreadsheets or software.
In Making Tax Digital, it helps connect digital records to the software used to submit information to HMRC.
Digital links are an HMRC requirement for Making Tax Digital.
Digital records are the electronic records you keep.
Digital links describe how information moves between records, spreadsheets and/or software.
HMRC gives linked spreadsheet cells as an example of a digital link.
A formula in one sheet that pulls a value from another sheet can form part of a digital link.
HMRC includes CSV importing and exporting as an example of a way records can be digitally linked.
Manual retyping does not create a digital link.
A digital link moves information digitally from records into the software or process used for MTD submissions without re-entering any of the details.
Many accounting software products handle digital transfers internally with no additional links needed.
Linked cells, formulas, imports, exports and structured spreadsheet uploads can all form part of a digital process, depending on how the chosen MTD software works. See our guides on using Excel for MTD and using Google Sheets for MTD for more detail.
When using suiteSheets, submission figures are held in the Overview sheet.
suiteSheets needs submission figures from the Overview sheet to be in a specific format so they can be sent to HMRC via the bridging software.
Sole traders and landlords can use a full suiteSheets template with an Overview sheet built in. Or they can simply add the suiteSheets Overview sheet to their existing spreadsheet and link in existing totals.
This guide is provided for general information only and is based on HMRC guidance available at the time of writing.
suiteSheets is software for spreadsheet users. We do not provide tax advice, accounting advice or legal advice. If you are unsure how Making Tax Digital applies to your circumstances, contact HMRC or a qualified adviser.
These HMRC pages provide further context on Making Tax Digital for Income Tax, eligibility, digital records, compatible software and signing up.
Try the FREE suiteSheets template
Want to see what a spreadsheet designed for Making Tax Digital looks like?
Download the free suiteSheets template and explore how income, expenses and totals can be structured for a spreadsheet-based MTD solution.
Open a FREE suiteSheets account
suiteSheets is MTD-compatible software designed for sole traders and landlords who prefer a spreadsheet-based approach to Making Tax Digital.
Open your free suiteSheets account and explore Making Tax Digital make easy.
