MTD Exemptions

MTD Exemptions

Not all businesses need to comply with MTD. There are some MTD exemptions. The following businesses are exempt. How to apply to HMRC for an MTD exemption?

MTD exemptions carried forward

VAT online was introduced several years ago with a few exemptions. All businesses which were exempt from VAT online are automatically carried forward into the new MTD exemptions.

Businesses which previously qualified and now qualify for MTD exemptions are as follows:

  • It is not practical to use digital tools because of age, disability or remoteness of location.
  • They are currently going through an insolvency.
  • The owners religious beliefs are incompatible with using electronic communications or maintaining records electronically.

Further detail on the carried forward exemptions

HMRC have provided further detail on the above requirements which are as follows:

  • Age – HMRC do not state a specific age, instead they will judge each case on it’s own merit.
  • Disability – They must have a disability which prevents the individual from using a PC or alternative electronic device.
  • Remoteness – The area doesn’t provide internet and it is not reasonable to expect them to go to an alternative location. i.e a public location (such as library, coffee shop) is not deemed appropriate by HMRC.
  • Insolvency – Typically where an administrator has been appointed or a bankruptcy / winding-up order has been issued.
  • Religion – The business must be entirely run by those of a society which is exempt on religious grounds by HMRC.

Who is not required to apply for an MTD exemption?

As mentioned above, those who were exempt from VAT online are automatically exempt from MTD. As a result, they don’t need to apply.

Also, businesses which had taxable turnover under £85,000 automatically had an MTD exemption. This exemption has now ended. All VAT registered businesses must comply with MTD for VAT except those which qualify above.

Who should apply?

The areas of age, disability and remoteness are subjective and will likely receive the most HMRC applications.

Whether a business qualifies will be judged on its own merits.

How to apply for an MTD exemption?

Applications for an MTD exemption can be made by phone or post.

The phone number is the VAT helpline 0300 200 3700.

The postal address is HM Revenue & Customs, VAT Written Enquiries Team, Portcullis House, 21 India Street, Glasgow, G2 4PZ

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