Understanding exclusion notices for Making Tax Digital for Income Tax

This guidance outlines the legal framework for individuals seeking an exclusion notice from Making Tax Digital for Income Tax requirements. It clarifies how taxpayers notify HMRC if they believe they are excluded and details the process HMRC follows to issue or update these notices.

What it means for a practice

• You may need to assist clients in formally notifying HMRC if they believe they qualify for an exclusion, ensuring the notice includes all required dates and justifications.
• If a client holds an exclusion notice without an end date, you must monitor their circumstances and report to HMRC within three months if the client ceases to be excluded.
• HMRC may issue exclusion notices independently, so practices should ensure they are aware of any notices sent directly to their clients regarding their exemption status.