How to apply for an exemption

Taxpayers who qualify for automatic permanent exemptions do not need to submit any paperwork to HMRC. However, if you believe you qualify for an exemption on the grounds of "Digital Exclusion," you must submit a formal application to HMRC and receive written approval.

How to Apply for Digital Exclusion

Applications for digital exclusion can be made either by telephone or in writing. To apply, you or your authorized tax agent must contact HMRC directly:

• By Telephone: Call HMRC's Self Assessment helpline and state clearly that you wish to apply for an MTD ITSA exemption on the grounds of digital exclusion.
• In Writing: Write to HMRC's Self Assessment office using a highly specific subject line on your letter: "Making Tax Digital for Income Tax — digitally excluded application" or "Making Tax Digital for Income Tax — exemption application".

What to Expect and Timeline

When you submit your application, HMRC aims to review the evidence and issue a formal decision within 28 days. During the period while your application is being processed, or if you are appealing a rejection, you must continue to comply with all MTD ITSA obligations if you are otherwise mandated.

If your application is refused, you have 30 days from the date of the decision letter to lodge a formal appeal. If you already hold a digital-exclusion exemption for MTD for VAT, this does not automatically carry over to MTD ITSA—you must contact HMRC to confirm that your circumstances have not changed and request that the exemption be applied to your income tax record.