Age Exemption for MTD: Who Can Opt Out of Making Tax Digital?

One of the most common questions about Making Tax Digital is whether older taxpayers can be exempt. The short answer is: there is no automatic age-based exemption from MTD. However, HMRC does offer exemptions for people who are ‘digitally excluded’ for genuine reasons, and age can be one of the factors considered. This guide explains exactly who qualifies, what counts as digital exclusion, how the application process works, and what happens if your application is rejected.

This is a frequently misunderstood area. Many taxpayers believe there is a straightforward age cutoff (for example, over 70 or over 75) that automatically exempts them from MTD. This is not the case. HMRC assesses each application individually based on your specific circumstances, not your age alone. Written by ICAEW chartered accountants who have helped clients apply for MTD exemptions successfully.

There Is No Automatic Age Exemption from MTD

HMRC has been clear on this point repeatedly. Making Tax Digital does not include an automatic exemption based on age. A 90-year-old landlord with rental income over the threshold faces the same MTD ITSA requirements as a 30-year-old freelancer, unless they successfully apply for and receive a digital exclusion exemption.

Common myth: ‘I am over 70 so I do not need to worry about MTD’ is incorrect. Age alone does not exempt you. Many people over 70 use smartphones, banking apps, and email perfectly well. HMRC’s exemption is based on inability to use digital tools, not unwillingness or preference for paper.

This matters because failing to comply with MTD on the assumption that you are exempt (when you are not) can trigger penalties, late filing charges, and HMRC enquiry.

What Is Digital Exclusion Under MTD?

HMRC defines digital exclusion as a situation where a taxpayer genuinely cannot engage with the digital systems required by MTD. This covers several categories:

1. Age-Related Digital Inability

Advanced age combined with genuine inability to use computers, tablets, smartphones, or the internet for record-keeping and submission purposes. This is not about preference. It is about genuine inability that cannot reasonably be overcome with training or assistance.

2. Disability

Physical or mental disability that prevents using digital devices or software. This includes visual impairment that cannot be accommodated by accessibility features, motor disabilities preventing keyboard or touchscreen use, cognitive disabilities preventing software comprehension, and mental health conditions where digital engagement causes genuine distress.

3. Remote Location

Living or operating a business in a location where reliable internet access is not available. This applies to genuinely remote rural areas of Scotland, Wales, Northern Ireland, and parts of England where broadband and mobile data coverage remain inadequate for reliable cloud-based accounting.

4. Religious Objection

Members of certain religious communities (for example, some Amish-adjacent groups or certain Orthodox communities) whose religious beliefs genuinely prohibit the use of electronic record-keeping. This is a very narrow exemption and HMRC applies it carefully.

5. Other Genuine Reasons

HMRC considers other circumstances on a case-by-case basis. This might include people under the supervision of the Official Receiver (bankruptcy), people in long-term care where digital access is genuinely impractical, or other exceptional circumstances.

What Does NOT Qualify for MTD Exemption

HMRC has been clear about what does not constitute digital exclusion:

•       General preference for paper records over digital records
•       Dislike of computers or technology
•       Unwillingness to learn new software
•       Cost of software or equipment (free MTD options exist)
•       Age alone without demonstrated inability
•       Having successfully used online banking, email, or smartphones
•       The availability of an accountant or agent who could file on your behalf
•       Previous use of HMRC online services (which demonstrates digital capability)

The accountant test: HMRC’s position is that if you can instruct an accountant to handle your MTD compliance on your behalf, you are not digitally excluded. The existence of affordable accountant services that handle all MTD requirements removes the ‘inability’ argument for many applicants. This is the most common reason exemption applications are rejected.

How to Apply for MTD Digital Exclusion Exemption

For MTD VAT Exemption

1.     Contact HMRC’s VAT helpline: 0300 200 3700
2.     Explain that you wish to apply for exemption from MTD VAT on digital exclusion grounds
3.     HMRC will ask about your specific circumstances (age, disability, location, etc.)
4.     You may need to provide supporting evidence (medical documentation, location evidence)
5.     HMRC reviews and responds (typically within 28 days)
6.     If approved, you continue filing VAT returns via the old online portal or by phone

For MTD ITSA Exemption (From April 2026)

7.     Contact HMRC’s Self Assessment helpline: 0300 200 3310
8.     Request digital exclusion exemption from MTD ITSA
9.     Provide details of your specific circumstances
10. HMRC assesses your application individually
11. If approved, you continue with annual Self Assessment in the traditional format

What Evidence Helps Your Application

•       Medical evidence of disability preventing digital use (GP letter, specialist report)
•       Evidence of no internet access at your location (broadband availability checker results)
•       Statement explaining specific barriers (inability to read screens, inability to use keyboard, etc.)
•       Evidence from care home or supported living facility (if applicable)
•       Religious community leadership letter (for religious objection claims)

Application tip: Be specific about WHY you cannot use digital tools, not just that you prefer not to. ‘I have macular degeneration affecting both eyes and cannot read screens even with accessibility magnification at maximum settings’ is a strong application. ‘I am 78 and do not like computers’ is not.

What Happens If Your Exemption Is Approved

For MTD VAT

•       You continue filing VAT returns via the old HMRC online portal or by telephone
•       You are not required to use MTD-compatible software
•       You still need to keep adequate records for VAT purposes
•       Your VAT obligations (filing deadlines, payment deadlines) remain the same
•       HMRC may review your exemption periodically

For MTD ITSA

•       You continue with annual Self Assessment in the traditional format
•       No quarterly submissions required
•       Standard 31 January filing deadline continues
•       You still need to keep adequate records for Income Tax purposes

Exemption from MTD does NOT exempt you from paying tax. It only exempts you from the digital record-keeping and digital submission requirements. All tax obligations remain unchanged.

What Happens If Your Exemption Is Rejected

If HMRC rejects your digital exclusion application, you have several options:

Option 1: Appeal the Decision

You can ask HMRC to review the decision. Provide additional evidence supporting your case. HMRC will reconsider based on the new evidence. If still rejected, you can escalate to the independent Adjudicator’s Office or ultimately to a First-tier Tribunal.

Option 2: Use an Accountant or Agent

The most practical option for most people. A chartered accountant can handle all MTD compliance on your behalf. You provide paper records (receipts, bank statements, invoices) and the accountant enters them into MTD software and submits quarterly. You never need to touch a computer. Monthly fees start from £40.

Option 3: Get Help From Family or Friends

HMRC accepts that a family member or trusted friend can operate MTD software on your behalf. You remain legally responsible for the accuracy of the information, but someone else can physically operate the technology.

Option 4: Use HMRC’s Assisted Digital Service

HMRC provides limited assisted digital support for taxpayers who struggle with technology. This can include telephone support for registration and filing. However, this service is limited and not a complete substitute for proper MTD compliance.

Practical reality: For most older taxpayers whose exemption applications are rejected, using a chartered accountant is the best solution. Typical monthly fees of £40 to £100 for simple MTD compliance are comparable to what many were already paying for annual Self Assessment preparation.

Practical Alternatives to Exemption

Before applying for exemption, consider whether one of these practical alternatives solves the underlying problem:

1. Accountant-Managed MTD

Your accountant handles everything digitally on your behalf. You continue with paper records (receipts in envelopes, bank statements in folders) and post or hand them to your accountant periodically. They enter everything into MTD software and submit quarterly. This is the most common solution for older taxpayers and works very well.

2. Family Member as Digital Assistant

A son, daughter, grandchild, or trusted person operates the software using your login. They categorise transactions, connect bank feeds, and submit returns. You review the summary figures before submission. Many families manage this successfully.

3. Simplified Software Setup

Modern MTD software (especially FreeAgent) is designed to be extremely simple. With bank feed automation, most transactions categorise themselves after the first month. If you can use a smartphone to read WhatsApp messages, you can likely use FreeAgent with initial setup help. Do not assume you cannot manage it without trying.

4. Community or Charity Digital Support

Age UK, local libraries, and community centres often provide free digital skills training. HMRC has also funded digital inclusion programmes. These can bridge the gap between ‘I cannot use a computer’ and ‘I can manage basic accounting software with support’.

Case Study: Finding the Right Solution for an 82-Year-Old Landlord

An 82-year-old retired teacher living in the Somerset area came to us via her daughter in late 2025. She owned two buy-to-let properties in Bath with combined gross rental income of approximately £54,000. She had managed her own annual Self Assessment for 30 years using paper records and a hand-calculated tax return (later submitted online by her daughter). MTD ITSA from April 2026 would require quarterly digital submissions.

Her situation:

•       82 years old, living independently, mentally sharp
•       2 BTL properties in Bath, £54,000 gross rental income (over £50,000 threshold)
•       No computer at home, uses a basic mobile phone (not a smartphone)
•       Daughter lives 40 miles away and visits monthly
•       Previous accountant retired in 2024 with no MTD capability
•       Anxious about MTD requirements and considered selling properties to avoid compliance

What we assessed:

We considered three paths: exemption application, family-assisted digital, or accountant-managed MTD.

Path 1: Exemption application

Likely to be rejected. She was mentally capable, had used HMRC online services (daughter’s laptop) in previous years, and her location had adequate broadband. Age alone would not qualify her. We advised against applying to avoid wasted time and false hope.

Path 2: Family-assisted

Possible but dependent on daughter’s availability. Monthly visits would not be frequent enough for quarterly MTD submissions with proper bank reconciliation.

Path 3: Accountant-managed (recommended)

What we did:

12. Set up her as a client with our firm handling all MTD ITSA compliance
13. Configured FreeAgent with both rental properties and connected to her NatWest account via bank feed
14. All transaction categorisation handled by our team
15. Quarterly MTD submissions prepared and filed by us
16. She continues posting paper receipts and documents to us monthly in a pre-addressed envelope we provide
17. Daughter reviews quarterly summary emails we send (optional oversight)
18. Annual Final Declaration handled completely by us

Outcome: Full MTD ITSA compliance from April 2026 without the client touching any technology. She continues her paper-based routine (receipts in envelopes, bank statements filed). We handle everything digital. Monthly fee: £110 all-inclusive for both properties. She kept her properties (and the £54,000 income) rather than selling to avoid compliance. The daughter has peace of mind. No exemption application needed.

Lesson: For most older taxpayers, the practical answer is not exemption. It is proper support. An accountant-managed solution costing £110 per month preserves £54,000 per year of rental income. Selling properties to avoid MTD compliance would have been a genuinely terrible financial decision.

MTD Age Exemption: FAQs

Is there an age limit that exempts me from MTD?

No. There is no automatic age-based exemption from Making Tax Digital. HMRC does not set a cutoff age (such as 70 or 75). Exemptions are based on demonstrated digital exclusion, not age alone.

What is digital exclusion under MTD?

A situation where a taxpayer genuinely cannot engage with digital systems due to age-related inability, disability, remote location without internet, religious objection, or other genuine circumstances. Assessed individually by HMRC.

Can I get exempt from MTD if I am over 70?

Not automatically. Being over 70 is one factor HMRC considers, but only alongside demonstrated inability to use digital tools. If you can use a smartphone, online banking, or email, age alone is unlikely to qualify you for exemption.

How do I apply for MTD exemption?

Contact HMRC’s VAT helpline (0300 200 3700) for MTD VAT exemption, or Self Assessment helpline (0300 200 3310) for MTD ITSA exemption. Explain your circumstances and provide supporting evidence. HMRC responds within approximately 28 days.

What evidence do I need for an MTD exemption application?

Medical evidence of disability (GP or specialist letter), evidence of no internet access at your location, specific statement of barriers (visual impairment detail, motor disability detail), care home evidence, or religious community letter. Be specific about WHY you cannot use digital tools.

Does having an accountant affect my exemption application?

Yes significantly. HMRC’s position is that if an accountant can handle MTD compliance on your behalf, you are not digitally excluded. The availability of affordable accountant services is the most common reason applications are rejected.

What happens if my exemption is rejected?

Options: appeal with additional evidence, use an accountant to handle MTD on your behalf (most practical), get family or friend help, or use HMRC’s limited assisted digital service. Most people find accountant-managed MTD the best solution after rejection.

Can my daughter or son do my MTD for me?

Yes. A family member can operate MTD software on your behalf using your login or as an informal agent. You remain legally responsible for accuracy. This works well for many older taxpayers with digitally capable family members.

If I am exempt from MTD, do I still pay tax?

Yes. MTD exemption only removes the digital record-keeping and digital submission requirements. All tax obligations remain unchanged. You still file returns (via old methods) and pay all tax owed.

Can I get exempt because I do not have a computer?

Unlikely on its own. HMRC expects you to use an accountant, family member, smartphone, or library computer. Not owning a computer is not the same as digital exclusion. However, combined with other factors (advanced age, disability, remote location), it strengthens an application.

What if I live in a rural area with no broadband?

This can qualify for exemption if you can demonstrate genuinely inadequate internet access at your location. Use the Ofcom broadband availability checker to evidence your position. Must be genuine lack of access, not just slow speeds.

Can I be exempt from MTD VAT but not MTD ITSA?

Yes. Exemptions are scheme-specific. You could be approved for MTD VAT exemption but not MTD ITSA, or vice versa. Each requires a separate application and is assessed on its own merits.

Is there a cost-free way to comply with MTD if I cannot afford software?

Yes. FreeAgent is completely free with NatWest, RBS, Ulster Bank, or Mettle business banking. HMRC also provides limited free tools. The ‘cost of software’ argument does not support an exemption application because free options exist.

What about people in care homes?

People in residential or nursing care where digital access is genuinely impractical may have stronger exemption cases. Evidence from the care facility supporting the application helps. However, many care home residents have family members or solicitors who can instruct accountants on their behalf.

Will HMRC review my exemption in future?

Yes, HMRC may review exemptions periodically. If your circumstances change (you get internet access, you recover from a disability, you move to a connected area), your exemption could be withdrawn. Exemption is not necessarily permanent.

Need Help With MTD Compliance? Free ICAEW Consultation

Whether you are considering an exemption application or simply need someone to handle MTD on your behalf, we can help. For most older taxpayers, accountant-managed MTD is more practical, more reliable, and more cost-effective than pursuing an exemption that may be rejected.

At MTD – Making Tax Digital (part of B1 Accountants), our ICAEW chartered accountants provide full MTD compliance for clients who prefer not to handle technology themselves. We can:

•       Assess whether you have a genuine case for digital exclusion exemption
•       Help you apply for exemption with proper supporting evidence if appropriate
•       Handle all MTD compliance on your behalf if exemption is not the right path
•       Accept paper records by post and handle all digital conversion
•       File all quarterly submissions and annual Final Declaration
•       Provide clear summaries by letter or email to you or your family
•       Fixed monthly fees from £40 for simple businesses, £110 for landlord portfolios