A novel power hardware-in-the-loop interface algorithm, the Virtual Shifting Impedance, is developed, validated and demonstrated in this paper. Building on existing interface algorithms, this method involves shifting a part of the software impedance to the hardware side to improve the stability and accuracy of PHIL setups. However, compared to existing approaches, this impedance shifting is realized by modifying the command signals of the power amplifier controller, thus avoiding the requirement for hardware passive components. The mathematical derivation of the Virtual Shifting Impedance interface algorithm is realized step-by-step, while its stability and accuracy properties are thoroughly examined. Finally, the applicability of the proposed method is verified through PHIL simulation results.