From April, Making Tax Digital (MTD) for Income Tax applies to sole traders and landlords with income above £50,000. Some people may qualify for Making Tax Digital exemptions depending on their circumstances.
You can now apply to HMRC if you are digitally excluded. This may cover poor or no broadband in your area, limits caused by age, health or disability, or religious beliefs that prevent computer use.
What counts as “digitally excluded”?
- Internet access
You have no internet at your home or business because of where you are based. There is no reasonable alternative you can use. - Age, health or disability
Your age, a health condition, or a disability prevents you from using a computer, tablet or smartphone to keep digital records or submit them to HMRC. - Religious reasons
Your beliefs mean you do not use a computer, tablet or smartphone for business or personal tasks.
HMRC can also look at other cases individually. Some situations may qualify as Making Tax Digital exemptions. If you already have an exemption from using MTD-compatible software for VAT, you may remain exempt for Income Tax. This applies only if your circumstances have not changed.
What does not qualify?
HMRC will not grant an exemption if your only reason is that you:
- have previously filed paper Self Assessment tax returns
- are unfamiliar with accounting software
- only have a small number of digital records to create each year
Extra cost or extra time needed to comply does not qualify for an exemption.
For full details and to apply, read HMRC’s guidance on exemptions for digitally excluded taxpayers. If you think you may be eligible, or you’re unsure how the rules apply, get in touch and we’ll talk it through in plain English.