Who is exempt from MTD for Income Tax?

Making Tax Digital for Income Tax will be introduced for self-employed individuals and landlords from 6 April 2026.

From that date, those with qualifying income over £50,000 will need to submit quarterly updates and a final declaration to HMRC using MTD compatible software. In the coming years, the threshold will be lowered, mandating more taxpayers into the digital regime.

There are exemptions from Making Tax Digital for Income Tax, but they are limited. Some are automatic, some are temporary, and some you will need to apply for.

Permanent automatic exemptions from MTD

You will not need to apply for the following exemptions. They are automatic, based on the details in your 2024/2025 tax return and apply permanently unless your circumstances change.

You are exempt from MTD if you:

• have no National Insurance number
• act as a trustee, personal representative of a deceased person or are filing on behalf of a non-resident company (if you have your own self-employment or rental income outside of these roles, this income may fall within MTD)
• are a Lloyd’s underwriter in respect of underwriting business
• are not physically or mentally capable and have either given either an enduring or lasting Power of Attorney or have a deputy appointed by a UK court to act on your behalf

Temporary automatic exemptions

Some automatic exemptions are temporary and last until April 2027 (at the earliest) if on your 2024/2025 tax return you:

1. claimed averaging relief (for example farmers or creative artists)
2. claimed qualifying care relief
3. included the SA107 supplementary page, reporting income from trusts or estates
4. included the SA109 supplementary page

If you did not include any of these claims or pages on your 2024/2025 tax return but you reasonably expect to do so on your 2025/2026 or 2026/2027 tax return, you can apply for an exemption following the guidance below.

Other automatic exemptions last beyond April 2027 if you submitted your 2024/2025 tax return as any of the following:

• An employed ministers of religion
• A Lloyd’s underwriter with self-employed or property income
• A recipient of Married Couple’s Allowance
• A recipient of Blind Person’s Allowance

If you did not submit your 2024/2025 tax return as any of the above, but expect to do so for 2026/2027, you can apply for an exemption following the guidance below.

Exemptions you must apply for

• You may be able to apply for a digital exclusion exemption if you are unable to use digital tools due to age, disability, remote location or religious beliefs.
• Businesses already exempt from filing VAT returns using MTD software can contact HMRC and confirm there are no changes in circumstances. HMRC will then grant an exemption from MTD for Income Tax.
• If you expect to use any of the claims or pages noted above on your 2026/2027 tax return and did not use them on your 2024/2025 return
• If you expect to submit your 2026/2027 tax return as any of the above listed individuals and did not on your 2024/2025 return
• If you are a non-UK resident foreign entertainer or sportsperson
• If as a partner you claimed averaging relief on your 2024/2025 tax return, or you reasonably expect to on your 2025/2026 or 2026/2027 tax return

How to apply for an MTD exemption

If you believe you qualify for a non-automatic exemption, you must apply to HMRC before you are required to use MTD. You’ll need your National Insurance number, name, address, details of how you currently submit your tax return, the reason you think you are exempt, and if you have an accountant, what they will do for you. HMRC will consider each application on a case-by-case basis, within 28 days of the application.