Statutory Instruments
2021 No. 1076
Income Tax
The Income Tax (Digital Requirements) Regulations 2021
Made at 9.22 a.m. on 23rd September 2021
Laid before the House of Commons at 1.30 p.m. on 23rd September 2021
Coming into force 6th April 2024

The Commissioners for Her Majesty’s Revenue and Customs make the following Regulations in exercise of the powers conferred by paragraphs 2(4), 7 to 9, 11, 13 to 15 and 18 of Schedule A1 to the Taxes Management Act 1970.
1970 c. 9. Schedule A1 was inserted by section 60 of the Finance (No. 2) Act 2017 (c. 32).

PART 1 General

Citation and commencement
1. These Regulations may be cited as the Income Tax (Digital Requirements) Regulations 2021 and come into force on 6th April 2026.
Word in reg. 1 substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 3

Interpretation
2. In these Regulations—
“TMA 1970” means the Taxes Management Act 1970;
“Commissioners” means the Commissioners for Her Majesty’s Revenue and Customs;
...
“digital records” has the meaning given by regulation 6;
“the digital requirements” has the meaning given by regulation 3(1);
“digital start date” has the meaning given by regulation 4;
...
...
“HMRC” means Her Majesty’s Revenue and Customs;
“property business” has the same meaning as it has in section 263(6) of ITTOIA 2005;
“ITTOIA 2005” is defined in section 118 of TMA 1970. That definition was inserted by paragraphs 357 and 380 of Schedule 1 to the Income Tax (Trading and Other Income) Act 2005 (c. 5).
“quarterly deadline” has the meaning given by regulation 7(5);
“quarterly update period” has the meaning given by regulation 7;
“quarterly update” has the meaning given by regulation 7(2);
“relevant person” means a person to whom Schedule A1 applies by virtue of paragraph 1 or 2 of Schedule A1, other than a person to whom an exemption applies by virtue of Part 7 or 8 of these Regulations;
“retailer” has the same meaning as it does in Schedule 11 to the Value Added Tax Act 1994;
1994 c. 23.
...
“Schedule A1” means Schedule A1 of TMA 1970;
“update information” means financial information and other information in respect of the business of a relevant person for a quarterly update period;
“update notice” has the meaning given by regulation 8(1).
Words in reg. 2 omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 4(a)(i)
Words in reg. 2 omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 4(a)(ii)
Words in reg. 2 omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 4(a)(iii)
Words in reg. 2 substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 4(b)
Words in reg. 2 omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 4(a)(iv)
Words in reg. 2 substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 4(c)

Use of functional compatible software
3. (1) A relevant person must use functional compatible software to comply with the following requirements (“the digital requirements”)—
(a) to record digital records under Part 2;
(b) to preserve those digital records until the end of the relevant day as required by section 12B(1A)(b) of TMA 1970;
Section 12B was inserted by paragraph 3 of Schedule 19 to the Finance Act 1994 (c. 9). Section 12B(1A) was inserted by paragraphs 1 and 14 of Schedule 14 to the Finance (No. 2) Act 2017.
(c) to provide quarterly updates under Part 3; and
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reg. 3(1)(d) omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 5(a)(i)
(e) to provide corrections to digital records under Part 6.
Reg. 3(1)(e) inserted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 5(a)(ii)
(2) Where a relevant person has received notice to file for a year of assessment under section 8 of TMA 1970 and is required to file an end of period statement for that tax year, that person may use functional compatible software to comply with the duty to file the things mentioned in subsection (1AB)(a) for that year.
Section 8 was substituted by section 90(1) and (5) of Finance Act 1990 (c. 29). Section 8(1AB) was inserted by paragraphs 1 and 3 of Schedule 14 to the Finance (No. 2) Act 2017. See also section 8(1AC)(b)(ii) of TMA 1970 and paragraph 9 of Schedule A1.
Reg. 3(2): by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 5(b), it is provided that (14.3.2024) the words “and is required to file an end of year statement for that tax year” are omitted
(3) “Functional compatible software” means a software program or set of compatible software programs which comply with conditions set out in a software notice, where such notice has been made, and the functions of which include—
(a) recording and preserving digital records in a digital form;
(b) providing to HMRC quarterly updates ... by using the API platform; and
Words in reg. 3(3)(b) omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 5(c)
(c) receiving information from HMRC using the API platform in relation to a relevant person’s compliance with obligations under these Regulations.
(4) “Software notice” means a general direction given by the Commissioners which is stated to be given further to this regulation and specifies conditions with which functional compatible software must comply.
(5) A software notice may specify different conditions for different cases or purposes.
(6) “API platform” means the application programming interface that enables electronic communication with HMRC, as specified by notice made by the Commissioners.

Digital start date
4. (1) Where a relevant person is carrying on a business immediately before 6th April 2025 the digital start date that applies to that business is 6th April 2026.
“Business” is defined in paragraph 6 of Schedule A1.
Word in reg. 4(1) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 6(a)(i)
Word in reg. 4(1) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 6(a)(ii)
(2) Paragraph (5) applies where a relevant person—
(a) commences carrying on a business on or after 6th April 2025; and
Word in reg. 4(2)(a) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 6(b)(ii)
(b) is required to make or deliver a return under section 8 of TMA 1970 including information relating to that business.
Words in reg. 4(2) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 6(b)(i)
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reg. 4(3) omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 6(c)
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reg. 4(4) omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 6(c)
(5) The digital start date that applies to the business is 6th April in the year of assessment following the year of assessment in which the person was required to deliver the return.
Reg. 4(5) inserted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 6(d)

PART 2 Digital records

Keeping and recording digital records
5. (1) A relevant person must keep digital records for each business for the period beginning with the digital start date which applies to the business and ending with the date on which the business ceases.
(2) A relevant person must record a digital record by no later than—
(a) the quarterly deadline for the quarterly update period in which the digital record falls; or
Words in reg. 5(2)(a) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 7
(b) immediately before the relevant person provides the quarterly update for the quarterly update period in which the digital record falls,
Words in reg. 5(2)(b) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 7
whichever is the earlier.

Digital records
6. (1) Subject to paragraph (3), “digital records” for a business means records of—
(a) the financial information included in update information,
(b) the details of the items comprised in that financial information,
(c) the amounts of those items and dates on which those items were received or incurred, and
(d) such other information as the Commissioners consider relevant to ascertaining update information as may be specified by a notice made by the Commissioners which is stated to be made further to this regulation.
Words in reg. 6(1) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 8(a)
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reg. 6(2) omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 8(b)
(3) In respect of the retail sales of the business of a retailer, a relevant person may keep such digital records as may be specified by a notice made by the Commissioners which is stated to be made further to this paragraph.
Words in reg. 6(3) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 8(c)

PART 3 Quarterly updates

Quarterly updates
7. (1) A relevant person must provide to HMRC update information for a business, as specified in an update notice, in respect of each quarterly update period for each tax year.
Words in reg. 7(1) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 9(a)
(2) “Quarterly update” means the provision of information required by paragraph (1).
(3) Subject to paragraphs (8), (9) and (10) and regulation 9(1A), the quarterly update periods for a tax year are those specified in the following table.
	Period
Quarterly update period 1	The period beginning with the first day of the tax year (6th April) and ending with the following 5th July
Quarterly update period 2	The period beginning with the first day of the tax year (6th April) and ending with the following 5th October
Quarterly update period 3	The period beginning with the first day of the tax year (6th April) and ending with the following 5th January
Quarterly update period 4	The period beginning with the first day of the tax year (6th April) and ending with the following 5th April
Words in reg. 7(3) inserted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 9(b)(i)
Words in reg. 7(3) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 9(b)(ii)
Words in reg. 7(3) Table substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 9(b)(iii)
Words in reg. 7(3) Table substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 9(b)(iv)
(4) Each quarterly update must be provided by no later than the quarterly deadline.
(5) The quarterly deadlines for each quarterly update period are the dates specified in the following table.
	Deadline
Quarterly update period 1	7th August following the end of quarterly update period 1
Quarterly update period 2	7th November following the end of quarterly update period 2
Quarterly update period 3	7th February following the end of quarterly update period 3
Quarterly update period 4	7th May following the end of quarterly update period 4
Words in reg. 7(5) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 9(c)(i)
Word in reg. 7(5) Table substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 9(c)(ii)
Words in reg. 7(5) Table substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 9(c)(i)
(6) A relevant person may make an election under this paragraph for a business in respect of a tax year (“a calendar quarters election”).
(7) A calendar quarters election has effect for the tax year in respect of which it is made and for subsequent tax years until it is withdrawn.
(8) Subject to paragraph (9) and regulation 9(1A), where a calendar quarters election has effect for a tax year, the quarterly update periods for that tax year are those specified in the following table.
	Period
Quarterly update period 1	The period beginning with 1st April before the beginning of the tax year and ending with the following 30th June
Quarterly update period 2	The period beginning with 1st April before the beginning of the tax year and ending with the following 30th September
Quarterly update period 3	The period beginning with 1st April before the beginning of the tax year and ending with the following 31st December
Quarterly update period 4	The period beginning with 1st April before the beginning of the tax year and ending with the following 31st March
Words in reg. 7(8) inserted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 9(d)(i)
Words in reg. 7(8) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 9(d)(ii)
Words in reg. 7(8) Table substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 9(d)(iii)
Words in reg. 7(8) Table substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 9(d)(iv)
(9) For the first tax year for which a calendar quarters election has effect, each quarterly update period begins with the first day of the tax year (6th April) and ends on the date specified for that quarterly update period in the table in paragraph (8).
Words in reg. 7(9) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 9(e)
(10) For the tax year following the final tax year for which a calendar quarters election has effect, each quarterly update period begins with the 1st April before the beginning of the tax year and ends on the date specified for that quarterly update period in the table in paragraph (3).
Words in reg. 7(10) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 9(f)
(11) A calendar quarters election must be made by notice to HMRC before the relevant person provides any update information in relation to the first quarterly update in respect of a quarterly update period for the tax year in respect of which the election is made.
Words in reg. 7(11) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 9(g)
(12) A calendar quarters election may be withdrawn by notice to HMRC at any time.
(13) Where a calendar quarters election is withdrawn, it ceases to have effect—
(a) at the beginning of the tax year in which it is withdrawn, where the withdrawal is made before any update information has been provided for that year; and
Words in reg. 7(13)(a) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 9(h)
(b) immediately after the end of the tax year in which it is withdrawn, in all other cases.

Update notices
8. (1) “Update notice” means a notice made by the Commissioners which is stated to be made further to this regulation and which specifies update information to be provided to HMRC.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reg. 8(2) omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 10(a)
(3) For different descriptions of relevant person, different update information may be specified.
Words in reg. 8(3) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 10(b)

Commencement and cessation of the requirement to provide quarterly updates
9. (1) For the purposes of regulation 7(1), the first quarterly update period for a business is the period beginning on the digital start date which applies to the business.
Words in reg. 9(1) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 11(a)
(1A) Where a person ceases to carry on a business, the quarterly update period ends on the date of the cessation.
Reg. 9(1A) inserted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 11(b)
(2) A final quarterly update for the business is required for the quarterly update period during which the business ceases to be carried on.
Words in reg. 9(2) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 11(c)(i)
Words in reg. 9(2) inserted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 11(c)(ii)
(3) Where paragraph (2) applies, the relevant person must give notice of the cessation, and the date of the cessation, to HMRC on or before the quarterly deadline for the final quarterly update period.
Words in reg. 9(3) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 11(d)

Early provision of update information for quarterly update periods
10. (1) Subject to paragraph (2), a relevant person may provide update information as specified in an update notice for the whole of a quarterly update period before the end of that period.
Words in reg. 10 substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 13
(2) A relevant person may do so only if—
(a) the update information is provided by a date (“the provision date”) which is within 10 days before the end of the quarterly update period;
(b) when providing the update information, the relevant person confirms that the update information covers the whole of quarterly update period; and
(c) the relevant person reasonably expects that no update information will arise in respect of the period commencing with the provision date and ending with the end of the quarterly update period.
Words in reg. 10 heading substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 12

PART 4 End of period statements

Provision of end of period statements
11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

End of period notices
12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Specified information
13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Commencement and cessation of requirement to provide end of period statements
14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pt. 4 omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 14

PART 5 Retail sales of retailers

Retailers – elections
15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Digital records in relation to retail sales
16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pt. 5 omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 15

PART 6 Corrections and omissions

Digital records – corrections and omissions
17. (1) Where a relevant person discovers an error or omission in their digital records, the relevant person must correct the digital records as soon as possible.
(2) Paragraph (3) applies where—
(a) in consequence of such an error or omission a quarterly update is provided to HMRC which contains incorrect or incomplete information; and
(b) the final quarterly update has not been provided for the relevant period to which the quarterly update applies.
Words in reg. 17(2)(b) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 16(a)
(3) The relevant person must provide the correct or complete information to HMRC when the relevant person next provides—
(a) a quarterly update ...
Words in reg. 17(3) omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 16(b)

End of period statements – amendment by relevant persons
18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reg. 18 omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 17

End of period statements – corrections by HMRC
19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reg. 19 omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 18

PART 7 Digital exclusion exemption

Exemption for the digitally excluded
20. (1) The digital requirements do not apply to a person for a tax year if—
(a) at the time any of those requirements would otherwise apply the person is digitally excluded;
Paragraph 14(2) to (4) of Schedule A1 gives the meaning of “digitally excluded”.
(b) the person gives notice to HMRC that the person is digitally excluded; and
(c) the Commissioners confirm they are satisfied that the person is digitally excluded.
(2) A notice under paragraph (1)(b) must—
(a) specify how the digital exclusion condition is met in relation to the person; and
(b) specify the date from which the digital exclusion condition is met and, if the person has since ceased to be digitally excluded, the date on which the condition ceased to be met.
(3) On receipt of a notice under paragraph (1)(b), the Commissioners must give a notice that either they are or are not satisfied that the person is digitally excluded.
(4) A notice by the Commissioners under paragraph (3) must be given within 28 days of receiving the notice under paragraph (1)(b).
(5) Where—
(a) the Commissioners have given notice that they are satisfied that a person is digitally excluded; and
(b) the person then ceases to be digitally excluded,
the person must give notice of so ceasing to HMRC within 3 months of the person ceasing to be digitally excluded.
(6) A notice under paragraph (5) must specify the date on which the person ceased to be digitally excluded.
(7) If the Commissioners cease to be satisfied that a person is digitally excluded they must give notice to the person that they have ceased to be so satisfied.
(8) A notice under paragraph (7) must specify the date on which the Commissioners ceased to be satisfied that the person was digitally excluded.
(9) If a person ceases to be digitally excluded, the digital requirements apply in respect of the tax year following that in which the person ceased to be digitally excluded and to subsequent tax years.

PART 8 Other exemptions

Income exemption
21. (1) The digital requirements do not apply to a person for a tax year to which the exemption in this regulation applies.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reg. 21(2) omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 19(a)
(3) The exemption applies—
(a) for the tax year 2026-27, if the amount of the person’s qualifying income for the tax year 2024-25 is not more than £50,000, and
(b) for subsequent tax years, if 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 £30,000.
Reg. 21(3) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 19(b)
(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 ... 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.
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.
Words in reg. 21(5) omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 19(c)
(5A) But a person’s qualifying income for a tax year does not include any qualifying care receipts for that tax year.
Reg. 21(5A)-(5C) inserted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 19(d)
(5B) For the purpose of paragraph (5), the amount of income for each business is—
(a) the amount included in the return before any deductions, or
(b) if a person is not required to include in the return the amount of income before any deductions, the amount included in the return after deductions.
(5C) For the purposes of determining a person’s qualifying income for a tax year, no account will be taken of any amendment to that person’s return for that year if—
(a) it would increase that person’s qualifying income for that year, and
(b) it is made after the start of the tax year to which the exemption under this regulation would apply.
(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.
(8) “Qualifying care receipts” has the same meaning as in Chapter 2 of Part 7 of ITTOIA 2005.
Reg. 21(8) inserted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 19(e)

Income exemption: persons to whom the digital requirements have applied for three tax years
22. (1) The digital requirements do not apply to a person for a tax year to which the exemption in this regulation applies.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reg. 22(2) omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 20(a)
(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 £30,000.
Sum in reg. 22(3)(b) substituted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 20(b)
(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.

Election not to be exempt
23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reg. 23 omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 21

Non-resident company exemption
24. The digital requirements do not apply to a company which is chargeable to tax under Part 3 of ITTOIA 2005.

Trustee exemption
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.

Exemption for foreign businesses of non-UK domiciled individuals
26. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reg. 26 omitted (for the tax year 2025-26 and subsequent tax years) by virtue of Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 27

Qualifying care exemption
26A. (1) The digital requirements do not apply to a person in respect of that person’s provision of qualifying care.
(2) “Provision of qualifying care” has the same meaning as in Chapter 2 of Part 7 of ITTOIA 2005.
Regs. 26A, 26B inserted (14.3.2024) by The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 22

No NINO exemption
26B. (1) The digital requirements do not apply to a person for a tax year if on 31st January before the start of that tax year the person did not have a national insurance number.
(2) “National insurance number” means the national insurance number allocated within the meaning of regulation 9 of the Social Security (Crediting and Treatment of Contributions, and National Insurance Numbers) Regulations 2001.

PART 9 Election for Schedule A1 to apply

Election for Schedule A1 to apply
27. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pt. 9 omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 23

PART 10 Notices

Notices
28. (1) Paragraph (2) applies to a notice which may be made, or which may be required to be made, by a person under any of the following regulations—
(za) 6(1)(d);
Reg. 28(1)(za)(zb) inserted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 24(a)
(zb) 6(3);
(a) 7(11);
(b) 7(12);
(c) 9(3);
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Regs. 28(1)(d)-(f) omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 24(b)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(g) 20(1)(b);
(h) 20(5);
(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reg. 28(1)(i)(j) omitted (14.3.2024) by virtue of The Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), regs. 1, 24(b)
(j) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) Such a notice must be made in such form and provided in accordance with such method, including electronic, as the Commissioners may specify from time to time.
Justin Holliday
Joanna Rowland
Two of the Commissioners for Her Majesty’s Revenue and Customs
At 9.22 a.m. on 23rd September 2021

EXPLANATORY NOTE
(This note is not part of the Regulations)
These Regulations make provision under Schedule A1 of the Taxes Management Act 1970 (c. 9) (“TMA 1970”) for digital reporting and record keeping in relation to income tax.
Part 1 contains general provisions. Regulation 1 provides for citation and commencement. Regulation 2 is an interpretation provision. Regulation 3 defines “digital requirements” and “functional compatible software” and imposes a requirement on relevant persons to use functional compatible software to comply with the digital requirements. “Relevant person” is defined in regulation 2. Regulation 4 makes provision for a “digital start date” in relation to a business.
Part 2 makes provision in relation to digital records. Regulation 5 imposes a requirement on relevant persons to keep digital records for businesses for a period specified by reference to the business’ digital start date. Regulation 6 defines “digital records”.
Part 3 makes provision for quarterly updates. Regulation 7 imposes a requirement on relevant persons to provide update information in relation to a business to Her Majesty’s Revenue and Customs (“HMRC”) for periods of three months (“quarterly periods”), known as “quarterly updates”, and provides deadlines for doing so. Regulation 8 allows the Commissioners for HMRC (“the Commissioners”) to make an “update notice” specifying the information to be included in quarterly updates. Regulation 9 provides for the commencement and cessation of the requirement to provide quarterly updates, which are specified by reference to a business’ digital start date and cessation date. Regulation 10 makes provision for circumstances in which an update may be provided before the end of the quarterly period to which it relates.
Part 4 makes provision for end of period statements. “End of period statement” is defined in paragraph 8 of Schedule A1 to TMA 1970 (“Schedule A1”). Regulation 11 imposes a requirement on a relevant person to provide an end of period statement in relation to each relevant period. “Relevant period” is defined in paragraph 8(2) of Schedule A1. Regulation 12 allows the Commissioners to make an “end of period notice” specifying the information to be included in end of period statements. Regulation 13 sets out the information which may be specified. Regulation 14 provides for commencement and cessation of the requirements to provide end of period notices, which are specified by reference to a business’ digital start date and cessation date.
Part 5 makes provision in relation to the retail sales of retailers. Regulation 15 allows a “retailer”, which is defined in regulation 2, to elect in relation to each tax year to retain the digital records specified in a “retail sales notice” rather than the digital records specified in regulation 6. Regulation 16 allows the Commissioners to make a retail sales notice.
Part 6 makes provision in relation to corrections and omissions. Regulation 17 imposes an obligation to correct digital records where a relevant person discovers an error or omission in them, and to provide corrected information to HMRC in certain circumstances. Regulation 18 allows a relevant person to amend an end of period statement within a specified period. Regulation 19 allows HMRC to amend an end of period statement within a specified period so as to correct it, and requires HMRC to give notice to the relevant person where they do so.
Part 7 makes provision for an exemption for the digitally excluded. “Digitally excluded” is defined in paragraph 14 of Schedule A1. Regulation 20 provides that the digital requirements do not apply to a person in respect of a tax year if the person gives notice to HMRC that they are digitally excluded and the Commissioners confirm they are satisfied that the person is digitally excluded.
Part 8 makes provision for other exemptions. Regulation 21 provides an exemption based on income for relevant persons to whom the digital requirements did not apply in respect of the previous tax year. Regulation 22 provides an exemption based on income for relevant persons to whom the digital requirements applied for the previous three tax years. Regulation 23 makes provision for elections under regulations 21 and 22. Regulation 24 provides that the digital requirements do not apply to companies chargeable to tax under Part 3 of the Income Tax (Trading and Other Income) Act 2005 (c. 5). Regulation 25 provides that the digital requirements do not apply to a person acting as a trustee. Regulation 26 provides that the digital requirements do not apply to a person for a tax year in which that person is not domiciled in the UK in respect of their “foreign businesses”. Regulation 26 also defines “foreign businesses”.
Part 9 (regulation 27) makes provision in relation to elections for Schedule A1 to apply under paragraph 2(2) of Schedule A1.
Part 10 (regulation 28) makes provision in relation to notices which may be made by a person under these Regulations.
A Tax Information and Impact Note covering this instrument will be published on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.

Reg. 1 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
Reg. 2 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
Reg. 3 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
Reg. 4 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
Reg. 5 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
Reg. 6 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
Reg. 7 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
Reg. 8 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
Reg. 9 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
Reg. 10 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
Reg. 17 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
Reg. 20 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
Reg. 21 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
Reg. 22 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
Reg. 24 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
Reg. 25 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1
Reg. 28 in force at 6.4.2026 (as amended by S.I. 2024/167, reg. 3), see reg. 1