Making Tax Digital - Exempt businesses

Since 1 April 2019, under the Making Tax Digital (MTD) initiative, all UK VAT registered businesses above the VAT registration threshold have been required to file their VAT transactional data digitally. Since April 2020, all records must be stored digitally, and VAT returns must be prepared with a complete digital journey. However, several exemptions have been granted.

These include:

  • Businesses which have never crossed the VAT registration threshold, currently £85,000 per annum
  • Businesses under insolvency procedures
  • Members of religions whose beliefs prevent the use of electronic communications
  • Persons who may reasonably not be able to adopt compatible software for the reasons of disability, age, remoteness of location or any other reason
  • Businesses operating VAT margin schemes: second-hand goods; works of art; antiques collectors’ items
  • Businesses registered under the VAT Flat Rate Scheme
  • Businesses under the annual VAT return regime

Need help with your UK VAT compliance?



Researching UK VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade. 

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