MTD exemptions and how to apply

Are you exempt from MTD?

Most sole traders and landlords above the qualifying income threshold will have to comply with MTD for Income Tax. Exemptions are available, but they are limited to specific circumstances. "I'd rather not" or "it seems complicated" are not grounds for exemption.

There are two types of exemption. Some apply automatically, based on information HMRC already holds. Others you have to apply for. If you are exempt, you do not use MTD-compatible software, but you do continue to file a Self Assessment tax return as normal.

Partnerships are not currently within scope of MTD for Income Tax. HMRC will confirm the future timeline for partnerships separately.

Automatic exemptions

If you fall into one of these groups, HMRC grants the exemption without you needing to contact them, provided the relevant information is already on your tax record.

Income below the threshold

If your qualifying income is below the relevant threshold for the tax year in question, you are automatically exempt. You do not need to tell HMRC. See who needs to register for MTD for how the thresholds work.

No National Insurance number

If you did not have a National Insurance number on 5 April before the tax year in which you would otherwise be required to join, you are automatically exempt for that year.

Non-UK residents with non-UK income

If you were non-UK resident in the tax year used to determine your MTD start date, income from non-UK self-employment and non-UK property is automatically exempt. Any UK-source qualifying income you have may still bring you within MTD.

There is also a separate exemption for "new non-residents" - people who were UK resident in the year MTD mandation was based on but are non-resident in the year they would otherwise join. This requires you to contact HMRC rather than applying automatically.

Certain other groups

Some automatic exemptions last for 2026/27 only. For that year, you do not need to use MTD if your 2024/25 tax return included any of the following:

The SA109 supplementary page (residence, foreign income and gains)
The SA107 supplementary page (trusts and estates income)
A claim for averaging relief (for example, farmers or certain creative professionals)

If these applied in 2024/25, the exemption is automatic. If you did not include them in 2024/25 but reasonably expect to do so in 2025/26 or 2026/27, you need to apply to HMRC rather than relying on the automatic exemption.

Other automatic exemptions last beyond April 2027. HMRC will confirm the timeline for future mandation separately. These apply if:

You are a minister of religion filing SA102M
You are a Lloyd's member filing SA103L in respect of your underwriting business
You receive or transfer Married Couple's Allowance or Blind Person's Allowance
You are not physically or mentally capable of providing financial information to HMRC and have a lasting or enduring power of attorney, or a legally appointed deputy or guardian, in place

Budget 2026 announced further exemptions that last until further notice.* HMRC plans to make the regulations before April 2027. You will not need to use MTD if:

you are eligible for qualifying care relief (for example, foster carers and shared lives carers)
you are a non-UK resident foreign entertainer or sportsperson
you are expected to be non-UK resident

HMRC has not yet said exactly how these will be applied. Check with us or with HMRC before relying on one.

If you have already filed the relevant tax return and HMRC holds the information, you do not need to do anything for an automatic exemption. If you think you qualify but your circumstances are new or changed, contact HMRC to confirm.

Exemption you have to apply for: digital exclusion

If you are digitally excluded, you can apply to HMRC for an exemption. Being digitally excluded means it is not reasonably practicable for you to use MTD-compatible software to keep digital records or submit them to HMRC.

HMRC's guidance sets out three main grounds for digital exclusion:

Your age, a health condition, or a disability stops you from using a computer, tablet, or smartphone to keep digital records or submit them to HMRC.
You are a practising member of a religious society or order whose beliefs are incompatible with using electronic communications or keeping digital records, and you do not use a computer, tablet, or smartphone for business or personal use.
You cannot get internet access at your home or place of business because of your location, and you cannot get access at a suitable alternative location.

HMRC considers all applications on a case-by-case basis. There may be other circumstances that qualify, and HMRC will assess the specifics of your situation. There is no automatic exemption based on age alone - the question is whether your particular circumstances make it not reasonably practicable to comply.

If HMRC grants the exemption, its letter will say what type of exemption it is and how long it lasts. Some exemptions are permanent unless your circumstances change; others are temporary. If your circumstances change and you are no longer digitally excluded, you should tell HMRC.

What will not get you an exemption

HMRC is clear about this. The following are not grounds for exemption:

Preferring paper records.
Disliking accounting software.
Having only a small number of transactions.
Thinking MTD will take more time or cost more than your current approach.
Extra time or cost involved in signing up to and using MTD.

If you have access to help that would allow you to comply - including help from a friend, family member, or accountant - HMRC will typically take that into account when assessing whether digital exclusion applies to you personally.

Key point: If you submit a digital exclusion application and it is not accepted, you will need to comply with MTD. Continue preparing for MTD while you wait for a decision, so you are not caught short if the application is refused.

Having an accountant does not make you exempt

This is one of the most common misconceptions about MTD. Using an accountant or bookkeeper does not exempt you from the rules.

However, it is important to understand what the rules actually require. If your accountant uses MTD-compatible software to keep your digital records and submit quarterly updates to HMRC on your behalf, that satisfies the MTD requirements. The obligation is met - you just are not the one doing it yourself.

In that situation, you do not need to apply for a digital exclusion exemption. What you need is an accountant or bookkeeper who is set up to handle MTD compliance for clients.

If you apply for a digital exclusion exemption and you have an agent, HMRC will ask what your agent does and whether they could meet the requirements on your behalf. This forms part of their assessment.

How to apply

Applications for exemption are made by phone or by letter. There is no online form.

If you are applying for yourself or on behalf of a friend or family member, contact HMRC using the Self Assessment: general enquiries line or by writing to them.

If you are an agent applying on behalf of a client, use the Agent Dedicated Line for Self Assessment or PAYE for individuals.

If you write to HMRC, use the correct title on your letter so it is routed to the right team:

For a digital exclusion application: Making Tax Digital for Income Tax - digitally excluded application
For any other exemption application: Making Tax Digital for Income Tax - exemption application

What to include in your application

For a digital exclusion application, HMRC needs:

The reason you believe you are digitally excluded, with any supporting information (for example, a letter from a doctor, or evidence of your location and internet access).
Details of how you currently submit your tax return, including whether someone else helps you.
Whether you have an agent and, if so, what the agent does.
Any additional needs, so HMRC can provide appropriate support.

For other exemption types, you need to explain why you believe you are exempt and include any supporting information.

When to apply

Apply before you are due to join MTD. The guidance for digital exclusion applications is:

If you needed to use MTD from 6 April 2026 and have not yet applied, apply as soon as possible and continue preparing to comply while HMRC considers the application.
If you need to join from April 2027, apply from summer 2026 onwards.
If you need to join from April 2028, apply from summer 2027 onwards.

HMRC aims to respond within 28 days of receiving your application.

If a friend, family member, or agent applies on your behalf: HMRC will still assess your personal circumstances, not those of the person applying. If a friend or family member applies for you, they need your authorisation first - either given in writing (with your signature) or verbally over the phone while you are present.

If your application is not accepted

If HMRC refuses your exemption application, your decision letter will explain why and tell you how to appeal. You have 30 days from the date on the letter to appeal.

To appeal, write to HMRC at the address shown in your decision letter. Use the correct title:

For a digital exclusion appeal: Making Tax Digital for Income Tax - digitally excluded appeal
For any other appeal: Making Tax Digital for Income Tax - exemption appeal

Include any new information you want HMRC to consider. Continue preparing for MTD while the appeal is being considered.

If you are already exempt from MTD for VAT

A VAT exemption does not automatically carry over to MTD for Income Tax. If HMRC previously confirmed you are exempt from MTD for VAT because you are digitally excluded, you need to contact HMRC separately to confirm whether the same circumstances still apply and whether you will be exempt from MTD for Income Tax.

If your circumstances have not changed, HMRC may confirm that the same digital-exclusion exemption applies for Income Tax. If they have changed, you will need to submit a fresh application.

One important exception: if you are exempt from MTD for VAT solely because you are going through an insolvency procedure, that exemption does not carry over automatically to Income Tax. Budget 2026 said a small number of insolvent taxpayers will not need to use MTD for Income Tax,* but HMRC has not yet said who. Contact HMRC to check your position.

Temporary circumstances

If a temporary health condition or a significant life event - such as recovering from surgery or a bereavement - makes digital compliance unreasonable in the short term, you can apply for an exemption on those grounds. HMRC will consider these on a case-by-case basis. An exemption granted on temporary grounds is not permanent; HMRC may expect you to comply once your circumstances improve. The exemption letter will explain what type of exemption you have, how long it lasts, and what you need to do if your circumstances change.

If you have already signed up for MTD voluntarily and your circumstances then change so that you become digitally excluded, you should apply for an exemption as soon as your circumstances change. Continue using MTD while you wait for a decision.

Common questions

No. A preference for paper records or a dislike of software is not grounds for exemption. Digital exclusion is a legal test: it has to be not reasonably practicable for you to comply, given your personal circumstances. HMRC assesses this case by case. Reluctance or unfamiliarity with technology on its own will not meet that test, particularly if help is available to you.

Not in itself. Having an accountant does not exempt you from MTD. However, if your accountant uses MTD-compatible software and handles your quarterly updates and year-end tax return for you, the MTD requirements are met through them. You do not personally need to touch the software - but you do need an accountant who is actually set up for this. Check with your accountant what they are doing for MTD, rather than assuming the arrangement covers it.

HMRC aims to respond within 28 days. While you wait, you should continue preparing to use MTD in case your application is not accepted. If you have already signed up for MTD voluntarily and are waiting on an exemption decision, continue using MTD until you receive a decision confirming the exemption. Do not assume the application will be approved and stop preparing.

Yes. You have 30 days from the date on your decision letter to appeal. Write to HMRC at the address in the letter, using the title "Making Tax Digital for Income Tax - digitally excluded appeal" (or "exemption appeal" for other grounds). Include any new information or evidence you want HMRC to take into account. Continue preparing for MTD while the appeal is being considered.

There is no automatic exemption based on age alone. Age can be a relevant factor in a digital exclusion application - HMRC's guidance specifically mentions age as something that can stop someone from reasonably using digital tools - but it has to be considered alongside your actual circumstances. If your age, together with other factors like a health condition or lack of internet access, means it is not reasonably practicable for you to comply, that is the basis for an application. Age by itself is not sufficient.

*Announced in the Budget on 28 October 2026. A Budget announcement becomes law in one of two ways. Most tax changes go into the annual Finance Bill, which becomes law when it receives Royal Assent, usually early the following year. Others are made by regulations laid before Parliament. Until then, the details can change.

This page is general guidance, not advice for your own circumstances. It was correct as at the date shown at the top, and tax rules and rates change over time. Please take advice on your own position before acting on anything here.

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