For many landlords and small business owners in the UK, Making Tax Digital (MTD) has been a source of anxiety. The idea of keeping digital records, submitting quarterly updates, and managing taxes online leaves many people feeling unprepared. Surveys indicate that although only a small fraction of taxpayers feel confident navigating MTD, a significant number are nervous, overwhelmed, or unsure where to begin.
So, when HMRC mentions the possibility of an exemption for those who are digitally excluded, it can feel like a ray of hope, a way to escape the digital tax maze. But the reality is less comforting: exemptions are rarely granted and are meant only for those with genuine, unavoidable barriers to digital compliance.
This article explains what digital exclusion means, who is eligible to apply for an exemption, and how the application process works.
Understanding MTD Exclusion
HMRC may grant you an exclusion if it’s not reasonable or practical for you to use digital tools to maintain records or submit updates. Typical examples include age, disability or health issues that make using a computer difficult, living without internet access, religious beliefs, illness that stops you from using gadgets, etc.
It is essential to note: HMRC expects most taxpayers to comply digitally, so exemptions are strictly limited. Applying doesn’t guarantee relief from MTD.
Who Can Apply for an MTD Exemption
Realistically, exemptions are designed for:
Simply not wanting to use a computer or finding software confusing does not qualify.
How to Apply for an Exemption?
If you genuinely can’t meet the digital requirements of MTD, HMRC allows you to apply for an exemption, but this isn’t a quick or guaranteed escape route. The process involves explaining your situation in detail and demonstrating why using digital tools is not reasonable or practical for you. In other words, HMRC won’t take your word for it; they’ll expect clear evidence before approving your request.
If you’re struggling to manage the process yourself, don’t worry, you don’t have to do it alone.
You can apply for an exemption yourself, or someone else can use it on your behalf as long as they’re authorised to do so. This could be UKPA: your accountant or tax agent, or even a trusted friend or family member who has formal authorisation.
Keep in mind, though, that even if someone applies for you, the exemption is still decided based on your own circumstances, not theirs.
Also, before applying, it’s worth checking whether your agent already uses MTD-compatible software to manage your digital records and send updates to HMRC. If they do, you might already meet the MTD requirements, meaning you may not need to apply for an exemption at all.
We do have our own MTD-compatible software, RentalBux.
Step 1: Prepare Your Information
Before applying, gather:
- Your full name, address and National Insurance number
- Details of how you currently submit tax returns, including any accountant involvement
- A clear explanation of your digital exclusion, with supporting evidence if possible (e.g., medical letters, internet provider statements)
- Information about any agents assisting with your tax affairs
Step 2: Submit Your Application
Applications can be made by post or by phone:
- By Post - Send a letter titled “Making Tax Digital for Income Tax digitally excluded application” to:
Self-Assessment: General Enquiries
HM Revenue and Customs
BX9 1AS
United Kingdom
- By Phone - Contact HMRC Self-Assessment general enquiries for guidance.
If someone else is applying on your behalf, ensure you give them proper authorisation.
Step 3: Wait for HMRC’s Response
HMRC usually responds within 28 days. During this time, you should prepare to use MTD in case your exemption is not approved.
Step 4: What If Circumstances Change?
If you later become digitally excluded, you may opt out through your HMRC online account or reapply for an exemption. Exemptions are temporary and can be reviewed or revoked if your situation changes.
Key Takeaways
For official guidance and to apply, visit GOV.UK.
Conclusion
The idea of an MTD exemption might sound like a lifeline for those feeling overwhelmed by digital tax reporting. However, in reality, it’s a narrow doorway, not an escape hatch. HMRC only grants exemptions in exceptional circumstances, and most landlords and business owners will still need to adapt to digital processes.
If you’re feeling uncertain, the best step isn’t to look for a way out, but to get help early, speak to your accountant or explore MTD-compatible software that can make the process easier. With the right support, digital record-keeping doesn’t have to be as daunting as it seems.
MTD is here to stay, and while a few may be excused, for most, it’s about learning to work smarter, not avoiding the change altogether.
- List of MTD Benefits Beyond Just HMRC Compliance - 26 January 2026
- MTD for UK-Resident Landlords with Foreign Property - 11 January 2026
- MTD Made Simple for Landlords with Jointly Owned Properties - 5 January 2026
