MTD exemptions: who does not have to use Making Tax Digital for Income Tax

Margaret is fictional, but plenty of landlords will recognise her. She is 78, owns two flats she has let for over 20 years, and has always filled in a paper tax return at the kitchen table. She does not own a computer and has never used one. When a neighbour mentioned that landlords would soon have to send their figures to HMRC through software every three months, she began to worry that she would be forced to do something she simply cannot do.

HMRC does allow for people in Margaret’s position, and for several other groups too. The important thing is knowing which group you are in, because some exemptions happen without you doing anything, while others only exist once HMRC has accepted an application from you. This guide walks through each group in the order HMRC sets them out, using HMRC’s own conditions.

Exempt automatically, applying, or starting later

HMRC sorts exemptions in two ways. The first is how you get one. An automatic exemption is given by HMRC from the information it already holds, so you do not need to contact HMRC or send an application. An exemption you need to apply for is different: you tell HMRC why you think you are exempt, with whatever information supports that, and HMRC decides.

The second is how long it lasts. A permanent exemption lasts unless your circumstances change. A temporary one lasts until April 2027 at the earliest, which is why some people are better described as starting later than as being exempt for good.

It helps to keep both questions in mind as you read, because the same situation can appear twice: once as an automatic exemption, if it was already on your 2024 to 2025 tax return, and again as something to apply for, if you only expect it to appear on a later return.

Automatic exemptions that last unless your circumstances change

These apply without an application. You are automatically exempt if your qualifying income is £20,000 or less, and also if you do not have a National Insurance number before the start of the tax year. The guide for non-resident landlords looks at that second rule in more detail, since it is most often relevant to people living abroad.

Some exemptions follow the role you are filling rather than your own income. HMRC treats these as automatically exempt:

• a non-resident company submitting an SA700 return
• a trust submitting an SA900 return (including charitable trusts and trusts of non-registered pension schemes)
• acting as a personal representative of someone who has died

Self Assessment tax returns for these entities should continue as normal, and a personal representative must make sure any outstanding Self Assessment tax returns are completed. If you have your own personal self-employment or property income, you may still need to use Making Tax Digital for Income Tax to report that income.

You are also automatically exempt if your 2024 to 2025 tax return included either of the following:

• the SA103L supplementary page as a Lloyd’s member in relation to your underwriting business
• that you are not physically or mentally capable of providing information to HMRC and have either given power of attorney to someone in the UK to act on your behalf that is currently in place, or have a legally appointed deputy, controller or guardian in place

Automatic exemptions that mean starting later

A second set of automatic exemptions does not remove MTD for good. It moves your start back. You do not need to use MTD for Income Tax for the 2026 to 2027 tax year if, in your 2024 to 2025 tax return, you:

• claimed averaging relief (as a farmer, market gardener or someone who personally creates literary or artistic works) using the SA103 supplementary page as an individual
• claimed qualifying care relief (for example as a foster carer or kinship carer)
• included the SA107 supplementary page to report income from trusts or estates
• included the SA109 supplementary page

You do not need to contact HMRC for any of these. After that year, you will need to use MTD for Income Tax from the 2027 to 2028 tax year onwards if your qualifying income is above £30,000 in the 2025 to 2026 tax year.

The exemptions in the next group last beyond April 2027. You are automatically exempt if your 2024 to 2025 tax return included:

• the SA102M supplementary page because you are a Minister of religion of any faith, religion or denomination
• the SA103L supplementary page because you are a Lloyd’s member with self-employment or property income
• a declaration that you received or transferred Married Couple’s Allowance (for those born before 6 April 1935)
• a declaration that you received or transferred Blind Person’s Allowance

These are still not permanent. You will need to use Making Tax Digital for Income Tax in the future, and HMRC will set out the timeline for this at a later date. HMRC also lists partnerships alongside its automatic exemptions. Partnerships do not currently need to use Making Tax Digital for Income Tax. HMRC will set out the timeline for when partnerships need to use it in the future.

What HMRC means by digitally excluded

This is the exemption Margaret would need to look at, and it is worth reading slowly, because the wording is careful. Being digitally excluded means that it is not reasonable for you to use compatible software to keep digital records, or to send quarterly updates or submit your tax return. HMRC gives these as examples of why that may be true for someone:

• your age, health condition or 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 digital 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 business because of your location, and cannot get access at a suitable alternative location

It is not automatic. You need to apply, and HMRC decides. HMRC also explains what will not be enough on its own. It will not accept an application if your only reason is that:

• you previously filed a paper return
• you are unfamiliar with accountancy software
• you have a small number of digital records to create each tax year
• it will take extra time or cost for you to sign up to and use Making Tax Digital for Income Tax

That list matters for someone like Margaret. Having always used paper is not, by itself, a reason HMRC will accept, so her application would need to explain what stops her using a computer, tablet or smartphone, rather than only how she has done things in the past. There may be other reasons you may or may not be digitally excluded, and HMRC considers every application case by case.

If HMRC previously confirmed that you are exempt from sending VAT returns using Making Tax Digital compatible software because you are digitally excluded, contact Self Assessment general enquiries by phone or in writing with your National Insurance number, your VAT registration number, the reason you are digitally excluded and whether your circumstances have changed. If they have not changed, HMRC will confirm you are also exempt from Making Tax Digital for Income Tax; if they have changed, you will need to apply. HMRC’s Self Assessment general enquiries contact page has the current phone number and address. If your VAT exemption is because you are going through an insolvency procedure and you are signed up to Making Tax Digital for Income Tax, you will not be exempt and should continue to use the service.

When an agent, friend or relative already helps

Many people who could not manage software themselves already have someone who handles their tax return. HMRC addresses this directly. If your agent uses compatible software to keep digital records and submits them to HMRC, they will be able to meet the requirements for Making Tax Digital for Income Tax on your behalf, so you may not need to apply for a digitally excluded exemption. It is worth talking to your agent before you apply, so you both understand which route fits.

If an agent, friend or family member applies on your behalf, the exemption is still based on your personal circumstances. In other words, a relative applying for Margaret would be describing her situation, not their own. If you want an accountant to take MTD on for you, the guide to choosing help with MTD explains how to find one through the professional bodies’ own directories.

Other exemptions you need to apply for

Some of the situations covered by the automatic exemptions can also be applied for, when they were not on your 2024 to 2025 return but you reasonably expect them on your 2025 to 2026 or 2026 to 2027 return. For an exemption lasting until April 2027, that means:

• a claim for averaging relief (as a farmer, market gardener or someone who personally creates literary or artistic works) using the SA103 supplementary page as an individual
• a claim for qualifying care relief (for example as a foster carer or kinship carer)
• the SA107 supplementary page to report income from trusts or estates
• the SA109 supplementary page
• a partner who would otherwise need to use Making Tax Digital for Income Tax and who claimed averaging relief using the SA104 supplementary page in the 2024 to 2025 return, or reasonably expects to in the 2025 to 2026 or 2026 to 2027 return

HMRC lists the reasons someone may need the SA109 page in its exemption guidance. For an exemption lasting beyond April 2027, the situations you can apply for are:

• a declaration that you will receive or transfer Married Couple’s Allowance (for those born before 6 April 1935)
• a declaration that you will receive or transfer Blind Person’s Allowance
• the SA102M supplementary page because you are a Minister of any faith, religion or denomination

HMRC says you should not apply for these exemptions if you do not have a good reason to think you will include this information in your 2025 to 2026 or 2026 to 2027 tax return.

How to apply to HMRC

To apply, you must either call or write to HMRC using the contact details in Self Assessment: general enquiries. Agents use the Agent Dedicated Line for Self Assessment or PAYE for individuals. The Self Assessment general enquiries page holds the phone number and postal address, and the Agent Dedicated Line page does the same for agents. If a health condition or your circumstances make it hard to contact HMRC, its extra support page explains the help available.

You can apply yourself, or someone can apply for you if they are an authorised agent, or a friend or family member with your authorisation. A friend or family member needs your authorisation first, either in a letter to HMRC that you sign, or by phone with you there to give it verbally, using the Self Assessment general enquiries contact details.

If you write, HMRC asks you to use one of these subject titles:

• ‘Making Tax Digital for Income Tax — digitally excluded application’ for a digitally excluded exemption
• ‘Making Tax Digital for Income Tax — exemption application’ for any other exemption

Whichever way you apply, HMRC will want:

• your National Insurance number
• your name and address
• an explanation of why you think you should be exempt, with any information that supports it

For a digitally excluded application, HMRC also asks for:

• details of how you currently submit a tax return, including whether someone else helps
• the reason you think you are digitally excluded, with any information that supports it
• whether you have an agent (for example an accountant) and what the agent will do
• any additional needs, so HMRC can provide the right support

If you think more than one exemption applies, send a single application explaining why each one applies. On timing, HMRC asks you to apply before you would need to start using MTD for Income Tax. As of the date this guide was checked against GOV.UK (3 October 2026), its guidance on when to apply reads like this:

If you are not sure when you would start, the Am I in MTD? calculator can place your figures against each step.

While HMRC considers your application

HMRC aims to respond within 28 calendar days of receiving your application, and it may take longer if it needs more information. HMRC may check the information you gave or ask for more. You must also continue keeping records or supporting documents as you normally do for Self Assessment. If you have already signed up and your circumstances have changed, apply for an exemption and keep using Making Tax Digital for Income Tax while you wait to hear from HMRC.

HMRC then sends a letter confirming whether your application has been accepted and what you need to do next. If it is accepted, the letter explains the type of exemption and how long it will last. If you are exempt until April 2027, you will not need to sign up and use Making Tax Digital for Income Tax until the 2027 to 2028 tax year at the earliest.

If your application is not accepted, the decision letter explains why and how to appeal. An appeal goes in writing to the address in that letter, with any new information you want HMRC to consider. You can appeal up to 30 days after the date on the letter. How penalties work for people inside and outside MTD is covered in the MTD penalties guide rather than here.

What stays the same if you are exempt

An exemption from MTD is not an exemption from tax. If you are exempt, you will not have to use Making Tax Digital for Income Tax but you must continue to report your income and gains in a Self Assessment tax return as normal. For Margaret, if HMRC accepts her application, that would mean carrying on with the Self Assessment return she already knows, rather than sending quarterly updates through software.

If you are not exempt, and you do need to use MTD, the main MTD guide explains what quarterly updates involve, and the software selector narrows the tracked products to ones that suit your situation.

Questions people ask about MTD exemptions