What are digital links under Making Tax Digital?

In practice, in the UK

A digital link can be as simple as a formula in a spreadsheet pulling a cell from another tab, an API connection between two pieces of software, or an export file automatically imported into another system. What breaks the chain is a human step in between: reading a total off a screen and typing it into another program, or copying a number by hand from one spreadsheet into another, even if the value copied is correct. The rule is not about accuracy, which the manual step might well preserve, but about traceability — HMRC wants a chain it can follow without relying on someone having transcribed a figure correctly. Businesses that still rely on spreadsheets alongside their accounting software need to check that every join between them is a genuine digital link, not a habit that has simply gone unnoticed.

In Odoo

Within Odoo, the chain from an invoice line through to the VAT return is a single digital link by construction, since the return reads directly from posted journal entries rather than from an intermediate file. Digital links only become a live question at the edges of the system: a subsidiary ledger kept outside Odoo, a bridging spreadsheet used to consolidate several companies, or a manual adjustment made to a total before it reaches the return. Each of those needs its own digital connection back into the accounts, or the chain HMRC expects is broken at that point.

Common mistakes

• Assuming a spreadsheet used only for checking figures is harmless, when it sits inside the digital chain the moment a number from it is typed elsewhere.
• Overlooking bridging software as the weak link when data still moves between it and a source system by hand.
• Believing that a correct final figure excuses a manual step earlier in the chain.