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What does digital exclusion mean for MTD?

Posted by Greg Gillet on 05-Dec-2017 09:14:10

Digital exclusion is the inability to access online products or services or to use simple forms of digital technology.

Certain groups could be exempted from the digital aspects of MTD on the grounds of being digitally excluded, but what about those who are merely “digitally challenged”, those unwilling to engage in the digital future rather than genuinely excluded from it?  Read this short guide to digital exclusion and find out how digital exclusion might affect your practice and your clients.

This article is also available as a PDF - scroll to the bottom to download yours.

Causes of digital exclusion

Four main factors create digital exclusion:

  • Lack of access: No available broadband, no computer, no money to purchase these
  • Motivation: Not seeing the benefits or believing that these outweigh the costs
  • Lack of skills: Without access to equipment and training, skills can be hard to acquire
  • Lack of confidence: Fears of fraud and online security discourage many

The scale of the challenge

HMRC’s 2015 report on digital exclusion concluded that 15% of the UK population are digitally excluded and 37% are ‘assisted digital’ (need some help to interact with the government online).

The issue of digital exclusion for MTD

Steady improvement

According to figures from the Office of National Statistics, in 2017:

  • 90% of households in Great Britain had internet access, an increase from 89% in 2016 and 57% in 2006
  • 73% of adults accessed the internet using a mobile phone, more than double the 2011 rate of 36%
  • 77% of adults bought goods or services online, up from 53% in 2008

Location, location, locationMap of digital exclusion relating to MTD

Where you are in the country can have a big impact on your chances of digital exclusion. The Get Digital Heatmap shows this on a searchable map of the UK.

It uses a range of metrics on digital usage and connectivity to broadband and 4G, together with data on age, education, income and health to create a 9-point scale measuring the likelihood of overall exclusion or inclusion.

HMRC exemptions

Drawing on the existing online filing exemptions for VAT, HMRC has identified two groups who could be exempted from the digital aspects of MTD:

  • Practising members of a religious society or order whose beliefs are incompatible with the use of electronic communications
  • People for whom online filing is not reasonably practicable for reasons of disability, age, remoteness of location, or any other reason

Get ready for MTD

Although HMRC has said it will consider exemptions on a “case-by-case basis”, it’s unlikely that everyone who is currently digitally disadvantaged will be given full exemption from the requirements of MTD.

How will this affect your practice?

  • Some taxpayers who have been filing on paper will need an accountant to help them file digitally. Do you want their business? If they’re not online, how will they find out about you and make contact?
  • Is there anything you can do to encourage clients who are not yet online to get online? Are there local courses you could recommend? Or national initiatives such as the Barclays Digital Eagles? Could your practice produce its own guide?
  • Clients who cannot be encouraged to go online may create more work for the practice. How will this affect the fees you charge? Do you need to revise your letters of engagement? Will you need to withdraw from unprofitable work?


A version of this blog article is available as a PDF.  Click this button to view or download your copy.

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Topics: All posts | Tax | MTD