Making Tax Digital · Sole traders
How HMRC assesses a digital-exclusion application
ONLY£15A MONTHAn exemption application should explain a person's real barriers to digital compliance.
An exemption application should explain a person's real barriers to digital compliance. It should not depend on alarming claims that almost everyone is rejected, or a promise that one particular reason guarantees approval. HMRC's published criteria provide a more useful starting point.
Describe the practical difficulty
HMRC's exemption guidance focuses on whether it is reasonable for you to use compatible software for the required records and submissions. Explain what prevents that, how it affects the tasks and what realistic alternatives are available.
Being unfamiliar with software or preferring paper is not usually sufficient by itself. A disability, health condition or location-related access problem can require a more detailed explanation. Give facts about your circumstances rather than copying a generic letter that may not fit.
Assistance is part of the facts
A friend helping to send the application does not automatically prove that ongoing bookkeeping and filing are reasonably practicable. Explain what help is available, how often and with what limitations. HMRC states that applications made by an agent, friend or family member are still assessed on the applicant's circumstances.
Keep the outcome and follow any review or appeal instructions if you disagree. Do not assume an application itself permanently removes all filing responsibilities.
Worked example: make the explanation specific
“I do not like computers” gives little information. A more useful factual account explains that a particular health condition prevents prolonged screen use, what accessible options have been tried and why available help cannot reliably cover the required tasks.
That does not predict the outcome. It gives HMRC information relevant to its decision, while avoiding unsupported claims about what every case officer must do.
Share the information needed for the task
Tax records need to be useful without containing unnecessary personal detail. Keep payment references sufficient to reconcile the accounts, and hold sensitive client notes in the appropriate restricted system. Financial software should not become a second, informal store for clinical notes or identity documents.
Use individual accounts and the access controls available for the service. Remove access when a working relationship ends. A secure product can still be misused through shared sign-ins, forwarded access links or files sent to the wrong person.
For Open Banking, distinguish account-information access from payment initiation. Read the consent screen and check the authorised provider. Account-information permission does not itself authorise moving money, but Open Banking as a whole also includes separately authorised payment services. The FCA explains these different services.
If you need an assurance about encryption, hosting, retention or security testing, ask for the current documented answer. Terms such as “bank-grade” do not tell you which controls apply to a particular service. Choose a workflow whose permissions and responsibilities you understand, and protect the email or phone account used to recover access.
Keep the evidence connected to the figures
Your digital record should explain the amount, date and nature of the transaction. Keep the invoice, receipt, statement or other evidence that supports it. A photograph can make a paper document easier to retain, but a folder of photographs alone does not create complete transaction records.
For sole traders, HMRC normally requires business records to be kept for at least five years after the relevant 31 January filing deadline. Keep them longer where the rules for a late return, enquiry or other circumstances require it. Check the record-retention guidance.
Make the records usable by your future self. Include a short explanation where a bank description is vague, retain the calculation behind a business-use split and make corrections traceable. For a missing receipt, try the supplier account, email confirmation or a replacement invoice before relying on incomplete evidence.
At review time, compare your records with the bank or payment account and investigate differences. Equal totals are useful, but two errors can cancel each other out. A sample of individual transactions can reveal a duplicated purchase or an omitted customer receipt that a totals-only check misses.
Choose software by the work it needs to do
Start with your actual income sources and records. A sole trade, a UK property business and foreign property can involve different requirements. A product suitable for one set of circumstances is not automatically suitable for every annual-return item you might have.
HMRC's software guidance allows different approaches, including software connected to existing spreadsheets. Check the complete workflow: importing or recording transactions, reviewing the quarterly summary, submitting it, making corrections and completing the annual return.
Try a representative sample that includes a refund, a private transaction, a cash item and an awkward bank description. Ask how the system handles a missing period and how you export records if you leave. These questions are more informative than a long feature list.
Software support and professional tax advice are different services. Confirm who answers each kind of question, when help is available and what the quoted fee covers. Avona.app's entry-level self-service price is £15/month; professional services and additional product capabilities should be checked against the current scope rather than assumed to be included.
Choose the appropriate route
Check automatic and temporary exemptions as well as digital exclusion. If an exemption is unavailable, compare accessible software and professional support. Do not buy a managed service solely because someone claimed that asking a relative for help has already disqualified you.
Take the next step
Avona.app offers a self-service route from £15/month. Bring your records together, review the figures and choose a workflow that fits your business. For professional help, discuss the scope and total price of Avona Concierge, managed by chartered accountants, before choosing a service.