Though there might be some serious efficiencies to be gained from the introduction of the Making Tax Digital scheme (between £1.7 and £1.8 billion each year as per the government’s Digital Efficiency Report), HMRC has acknowledged that some of your individual and business clients will be exempt as they cannot transact online.
As per the Government Digital Inclusion Strategy published in December 2014, there are 3.5 to 4 million people that “may never have basic digital capabilities”. The main reasons for exclusion include:
The above challenges that some of your clients might face can be seen in detail in the graphic below
While some of these challenges are still being considered for small businesses, HMRC has decided that if your clients fall in any of the following groups they will be excluded:
Businesses and organisations
HMRC has stated that there will be exemptions for some businesses and organisations including:
Individuals - those who may never go online
It isn’t just businesses that don’t use the internet. HMRC recognises that a minority of people can’t use digital tools.
While only 5% of the adult population do not have basic literacy skills (2.6 million people), these groups, referred to as ‘digitally excluded’ are defined as those who can’t engage with accounting software for reasons such as:
In a consultation from earlier this year “Making Tax Digital: Bringing business tax into the digital age”, HMRC suggested it will consider other exemptions on a case-to-case basis.
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My name is Vishal Kurani, the author of the QXAS blog and I appreciate you stopping by! I help accountants gain Accounts Outsourcing knowledge through my easy to follow blogs and guides. Download my free guide "The Accountants Guide to Making Payroll Profitable" to learn how to make payroll profitable for your accountancy practice.