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By Paul Windmill
Director
Posted on: 08 March 2019

HMRC's Exemption Process for Making Tax Digital

Updated guidance has been issued by HMRC outlining the certain situations which businesses and individuals can receive exemption from Making Tax Digital. However, those wanting to apply have been warned that time is running out.

The Exemptions

It has been announced by HMRC that VAT registered businesses and individuals will not have to file digitally from the 1st April 2019 if using digital software to maintain records and file VAT returns is not feasible. Certain exceptions include age, disability, remoteness of location, an insolvency procedure, or if the business is run entirely by practising members of a religious society whose beliefs are incompatible with using electronic communications.

In regards to an exemption due to location or a disability, exemptions will be granted because:

  • Location - for example if they cannot get internet access at their home or business premises and it is not reasonable for them to get internet access at another location.
  • Disability - for example if they cannot use a computer, tablet or smartphone for the amount of time it takes to keep digital records for their business.

However, there are circumstances where exemption may not be granted. These include:

  • When individuals believe they should be exempt purely because of their age - HMRC will consider how age and circumstances impact ability to follow the rules for Making Tax Digital.
  • When individuals believe they should be exempt because they are unfamiliar with the relevant software - HMRC will take into account how much they use or intend to use a computer, tablet, smartphone or the internet for other purposes and whether it is reasonable for them to learn how to use Making Tax Digital software.
  • When individuals consider themselves to be a practising member of a religious society or order whose beliefs are incompatible with the use of electronic communications - but they are currently filing online and use a computer or smart device for business or personal use.

How to apply

To apply for an exemption, you will need to call or write to HMRC’s VAT general enquiries.

What you will need to apply

  • VAT Registration Number.
  • Business name and principal place of business.
  • Reason for exemption request.
  • Details about how you currently file VAT Returns.
  • The reasons why they would not be able to file returns through software or keep digital records.
  • Any other reason why they cannot follow the rules for Making Tax Digital.
Paul Windmill
Director

Paul has over 25 years’ experience working with a wide portfolio of clients, both very large and small across the South East. Paul advises on corporation tax planning and remuneration planning for company directors and senior management, as well