Prospective
21.—(1) The digital requirements do not apply to a person for a tax year to which the exemption in this regulation applies.
(2) The exemption does not apply if the person has elected not to be exempt.
(3) The exemption applies to a tax year if—
(a)the digital requirements did not apply to the person in respect of the previous tax year; and
(b)the amount of the person’s qualifying income for the most recent tax year in relation to which the filing deadline fell before the start of the tax year in question is not more than £10,000.
(4) The filing deadline in relation to a tax year is the date on or before which the person is required to comply with a notice to file under section 8 of TMA 1970.
(5) A person’s qualifying income for a tax year is the sum of the amounts of income, before any deductions, which, for each business carried on by the person in that tax year, are included in that person’s return under section 8 of TMA 1970 for that tax year(1).
(6) If a person’s qualifying income for a tax year is in respect of a period of other than 12 months, the qualifying income must be adjusted proportionately on a time basis, or, if it appears that that method would work unreasonably or unjustly, on a just and reasonable basis.
(7) If a person is not carrying on a business in a tax year the qualifying income is treated as nil.
Commencement Information
I1Reg. 21 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
22.—(1) The digital requirements do not apply to a person for a tax year to which the exemption in this regulation applies.
(2) The exemption does not apply if the person has elected not to be exempt.
(3) The exemption applies if—
(a)the digital requirements applied to the person in respect of each of the three previous tax years; and
(b)the person’s qualifying income for each of those three tax years was not more than £10,000.
(4) A person’s qualifying income for a tax year is—
(a)the sum of the amounts of income, before any deductions, which, for each business carried on by the person in that tax year, are included in that person’s return under section 8 of TMA 1970 for that tax year; or
(b)where the tax year has ended but the filing deadline for the tax year has not passed, so much of the amounts of income, before any deductions, as are included in the quarterly updates for that tax year for each business carried on by the person.
(5) The filing deadline in relation to a tax year is the date on or before which the person is required to comply with a notice to file under section 8 of TMA 1970.
(6) If a person’s qualifying income for a tax year is in respect of a period of other than 12 months, the qualifying income must be adjusted proportionately on a time basis, or, if it appears that that method would work unreasonably or unjustly, on a just and reasonable basis.
Commencement Information
I2Reg. 22 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
23.—(1) An election by a person not to be exempt under regulation 21 or 22 must—
(a)specify the tax year in respect of which the exemption would otherwise apply; and
(b)be made before the start of that tax year.
(2) An election has effect for the tax year referred to in paragraph (1)(a) and for subsequent tax years in which the exemption would otherwise apply.
(3) An election may be withdrawn at any time specifying the date of the withdrawal.
(4) The digital requirements apply to the tax year in which the date specified in the withdrawal falls.
(5) An election and any withdrawal of an election must be made by notice to HMRC.
Commencement Information
I3Reg. 23 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
24. The digital requirements do not apply to a company which is chargeable to tax under Part 3 of ITTOIA 2005.
Commencement Information
I4Reg. 24 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
25.—(1) The digital requirements do not apply to a person acting as a trustee.
(2) For the purposes of paragraph (1), a trustee includes an executor or administrator who is liable to income tax under section 74(1) of TMA 1970.
Commencement Information
I5Reg. 25 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
26.—(1) The digital requirements do not apply to a person in respect of that person’s foreign businesses for a tax year in which the person is not domiciled in the United Kingdom.
(2) For the purposes of paragraph (1), a person’s foreign businesses are—
(a)that person’s overseas property business within the meaning of section 265 of ITTOIA 2005; and
(b)any trade, profession or vocation carried on by that person outside the United Kingdom.
(3) Where a person carries on a trade, profession or vocation partly in the United Kingdom and partly outside the United Kingdom, the part carried on outside the United Kingdom is a foreign business for the purposes of paragraph (1), but the part that is carried on in the United Kingdom is not.
(4) Section 835BA (deemed domicile)(2) of ITA 2007(3) applies for the purposes of this regulation.
Commencement Information
I6Reg. 26 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
References to a return under section 8 of TMA 1970 are defined in subsection (7) of that section; that subsection was inserted by paragraphs 1 and 3 of Schedule 14 to the Finance (No. 2) Act 2017.
Section 835BA was inserted by section 29(1) of the Finance (No. 2) Act 2017.
“ITA 2007” is defined in section 118 of TMA 1970. That definition was inserted by paragraphs 242 and 263 of Schedule 1 to the Income Tax Act 2007 (c. 3).