Making Tax Digital: Advice for Digitally Excluded Taxpayers

HMRC has recently published guidance on how digitally excluded individuals can apply for an exemption from Making Tax Digital (MTD) for Income Tax. Gaining HMRC’s agreement that you are digitally excluded is essential to ensure compliance with MTD requirements.

What does “digitally excluded” mean?

Under MTD legislation, digitally excluded individuals are those unable to use electronic communications or keep electronic records due to factors such as:

• Religion

• Age

• Disability

• Location

• Other personal circumstances
  

It’s important to note that HMRC will not grant exemptions if the only reason is:

• Previously filing paper returns

• Being unfamiliar with accounting software

• Having only a few digital records each tax year

• Extra time or cost required to sign up or use MTD for Income Tax
  

Applying for an exemption

To apply for digital exclusion, you or your representative can either:

• Call HMRC’s Self Assessment general enquiries line: 0300 200 3310

• Write to:

  
  

  Self Assessment HM Revenue and Customs BX9 1AS United Kingdom
  

If a friend, family member, or agent is applying on your behalf, you must authorise them either in writing or over the phone.

Applications should include:

• Your name, address, and National Insurance number

• How you currently submit your tax return, including if someone else helps you

• Reasons you consider yourself digitally excluded, with supporting information

• Whether you have an agent (e.g., accountant) and their role

• Any additional needs HMRC should consider to provide appropriate support
  

Written applications should use the title:“Making Tax Digital for Income Tax - digitally excluded application”

HMRC aims to respond within 28 days, and if they refuse the exemption, you can appeal in writing to the address provided in the decision letter.

Individuals already exempt from MTD for VAT

If you are already digitally excluded for MTD VAT, you can apply for the same exemption for MTD Income Tax. HMRC will usually grant this if your circumstances remain unchanged. You will need to provide:

• Your National Insurance number

• Your VAT registration number

• Reasons for being digitally excluded from submitting VAT returns via MTD software
  

Getting support

If you are unsure whether you qualify for a digital exclusion exemption or need help submitting your application, the team at SJC, Chartered Accountants can guide you. We can discuss your situation, help you prepare your application, and advise on how to meet your MTD Income Tax obligations while ensuring you receive the support you need.