HMRC has released long-awaited guidance on how people who are digitally excluded can apply for an exemption from Making Tax Digital (MTD) for Income Tax.

If you think you may qualify, it’s important to get HMRC’s official agreement confirming your digitally excluded status.

What does “digitally excluded” mean?

Under MTD rules, you can be classed as digitally excluded if you’re unable to keep digital records or use online systems because of:

• Your religion,
• Age,
• Disability,
• Location, or
• Any other valid reason.

However, HMRC won’t accept exemption requests for reasons such as:

• You’ve always filed paper tax returns in the past.
• You’re not confident using accounting software.
• You only have a small number of digital records each year.
• Signing up for or using MTD would take more time or cost more money.

How to apply for an exemption

If you believe you’re digitally excluded, you (or someone acting for you) can apply by either:
Calling HMRC on 0300 200 3310 (Self Assessment general enquiries), or
Writing to:
Self Assessment
HM Revenue and Customs
BX9 1AS
United Kingdom

If a friend, family member, or representative contacts HMRC for you, you’ll need to authorise them – either over the phone or in writing.

Your application should include:

• Your name, address, and National Insurance number.
• Details of how you currently submit your tax return (including if someone helps you do this).
• The reason you think you are digitally excluded. This should include any additional information to support the claim.
• Whether you have an agent (like an accountant) and what they handle for you.
• Any additional needs you have, so that HMRC can provide the right support.

If applying in writing, use this heading: “Making Tax Digital for Income Tax – Digitally Excluded Application”

HMRC should respond within 28 days. If they reject your application, you can appeal in writing using the address provided in their letter.

Already exempt from MTD for VAT?

If you’re already exempt from MTD for VAT, you should contact HMRC by phone or in writing using the same details above. As long as your situation hasn’t changed, HMRC will also exempt you from MTD for Income Tax.

You’ll need to provide:

• Your National Insurance number,
• Your VAT registration number, and
• Confirmation that your circumstances haven’t changed since your VAT exemption.

If you’re unsure whether you qualify or need help preparing your application, get in touch with us – we can discuss your situation and guide you through the process.