Making Tax Digital for Income Tax: How to Apply for an Exemption

Check if you qualify for an exemption from Making Tax Digital (MTD) for Income Tax if you are digitally excluded.

What does “digitally excluded” mean?

You may be considered digitally excluded if it is not reasonable for you to use MTD-compatible software to keep records or submit returns to HMRC.

If you’re granted an exemption, you will not need to use Making Tax Digital for Income Tax.

Tip: Other exemptions may also apply. See: Find out if and when you need to use MTD for Income Tax.

Who can apply for a Making Tax Digital exemption?

You can apply if you believe you’re digitally excluded. Common reasons include:

• Age, disability, or health condition prevents you from using a computer, tablet, or smartphone.
• Religious beliefs mean you do not use digital devices or keep electronic records.
• No reliable internet access at home or your business location, and no suitable alternative nearby.

Who cannot apply?

HMRC will reject applications if your only reason is:

• You’ve previously filed paper returns.
• You’re unfamiliar with accounting software.
• You have only a small number of digital records.
• It takes more time or costs more to sign up.

Each case is reviewed individually, so provide clear reasons when applying.

If you already have a VAT exemption

If HMRC has already confirmed you are exempt from Making Tax Digital for VAT, you should:

1. Contact Self Assessment: General Enquiries (by phone or writing).
2. Provide:
   • Your National Insurance number.
   • Your VAT registration number.
   • The reason for your VAT exemption and whether circumstances have changed.

If your situation is unchanged, HMRC will confirm your exemption for MTD for Income Tax. If it has changed, you must reapply.

If your VAT exemption was due to insolvency, you will still need to use MTD for Income Tax.

How to apply for a Making Tax Digital exemption

If you believe you’re digitally excluded, you can apply directly to HMRC for an exemption.

 Apply for an exemption from Making Tax Digital for Income Tax

FAQs

Do I still need to keep digital records if I’m exempt?
No, if your exemption is approved, you will not be required to use MTD-compatible software.

What happens if my circumstances change?
If you regain digital access or your situation improves, you must inform HMRC.

Can small businesses apply for exemption?
Yes, but you must show valid reasons (not just cost or low record volume).

Key Takeaway

If you cannot reasonably use digital tools due to age, disability, religious beliefs, or lack of internet access, you may qualify for an exemption from Making Tax Digital for Income Tax. HMRC reviews applications on a case-by-case basis.