Glossary definition

What is digital exclusion?

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Digital exclusion is a special consideration from HMRC for people who cannot reasonably or practically use Making Tax Digital (MTD) software.

It is not automatic—you must apply, and HMRC decides case by case.

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If you fall within the scope of an MTD scheme—for VAT or Income Tax—following the rules is a legal requirement.

If you do not, you could face penalties, such as fines, plus interest on late payments.

You cannot opt out of MTD or simply switch back to older methods, such as submitting a Self-Assessment tax return for Income Tax.

Who can be digitally excluded?

You may receive digital exclusion if it is not reasonable or practical for you to use MTD-compatible software because of:

• your age
• a disability
• where you live
• another comparable reason

You can also be excluded if your religious beliefs prohibit the use of computers.

How do you get digital exclusion?

Digital exclusion is not automatic. HMRC grants it after considering an application.

You can apply for both MTD for VAT and MTD for Income Tax.

If you are already digitally excluded from MTD for VAT and your circumstances have not changed, contact HMRC to confirm whether the same exclusion applies to MTD for Income Tax.

Is digital exclusion the same as exemption?

No.

Exclusion is not the same as exemption.

Certain people are exempt from Making Tax Digital, including charitable trustees, trustees of non-registered pension schemes, and Lloyd’s underwriters.

Exemptions are applied automatically, so there is no need to apply to HMRC.

The UK government publishes the list of exempt people.

For a full breakdown of who qualifies and how to apply, read who is excluded or exempt from MTD for Income Tax.

Related terms:

• Making Tax Digital (MTD)
• MTD for Income Tax
• MTD for VAT
• Self-Assessment
• HMRC

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