The short answer
Some people are automatically exempt from Making Tax Digital for Income Tax, for example if your qualifying income is £20,000 or less or you had no National Insurance number before the tax year started. Others can apply to HMRC by phone or in writing, most often because they are digitally excluded, meaning age, health, disability, religious beliefs, or no internet access with no suitable alternative, make using software unreasonable. Exempt people still send a Self Assessment tax return.
What an MTD exemption means
An exemption means you do not have to keep digital records in software or send quarterly updates under Making Tax Digital for Income Tax. It does not take you out of Self Assessment. You must still report your income and gains on a Self Assessment tax return as normal.
HMRC sorts exemptions in two ways. Some are automatic, so you do not need to apply. Others you must apply for. Each one is either permanent, unless your circumstances change, or temporary, lasting until April 2027 at the earliest.
Before looking at exemptions, check whether you need MTD at all. Qualifying income is your self-employment and property income before expenses, and our article on working out qualifying income explains the test.
Who is automatically and permanently exempt
These groups do not need to apply. The exemption lasts unless your circumstances change.
- Your qualifying income is £20,000 or less.
- You did not have a National Insurance number before the start of the tax year.
- Trusts filing an SA900, non-resident companies filing an SA700, and personal representatives of someone who has died.
- Your 2024 to 2025 return showed a Lloyd’s underwriting business on the SA103L pages.
- Your 2024 to 2025 return showed that you cannot provide information to HMRC and have a power of attorney, or a deputy, controller or guardian, in place.
Temporary and longer automatic exemptions
Some automatic exemptions only last until April 2027, based on what your 2024 to 2025 return included. You do not need to use Making Tax Digital for Income Tax for the 2026 to 2027 tax year if that return showed averaging relief claimed as an individual on the SA103 pages, qualifying care relief as a foster or kinship carer, the SA107 trusts and estates pages, or the SA109 residence pages.
A third group is automatically exempt beyond April 2027. HMRC says these groups will need to use MTD in the future and will set out the timeline at a later date.
| Who | How long |
|---|---|
| Qualifying income of £20,000 or less | Permanent, unless circumstances change |
| No National Insurance number before the tax year | Permanent, unless circumstances change |
| Averaging relief on SA103, qualifying care relief, SA107 or SA109 on the 2024 to 2025 return | Until April 2027 |
| Ministers of religion (SA102M) | Beyond April 2027, timeline to be set |
| Lloyd’s members | Beyond April 2027, timeline to be set |
| Receiving or transferring Married Couple’s Allowance or Blind Person’s Allowance | Beyond April 2027, timeline to be set |
What digitally excluded means
You are digitally excluded if it is not reasonable for you to use software to keep digital records or to send updates and returns. The reasons HMRC accepts are your age, health condition or disability stopping you from using a computer, tablet or smartphone, your religious beliefs, or having no internet access at your home or business and no suitable alternative.
HMRC will refuse an application if the only reason is that you sent a paper return before, that you are unfamiliar with accountancy software, that you have few records, or that MTD would take extra time or cost money.
If HMRC has already accepted that you are digitally excluded from Making Tax Digital for VAT and your circumstances have not changed, it will confirm that you are also exempt from Making Tax Digital for Income Tax.
Other exemptions you can apply for
You can also apply for an exemption lasting until April 2027 if your 2024 to 2025 return did not show averaging relief, qualifying care relief, the SA107 pages or the SA109 pages, but you reasonably expect your 2025 to 2026 or 2026 to 2027 return to show one of them.
Partners who claim averaging relief on the SA104 partnership pages can apply too. Conditions apply to each of these, so read HMRC’s exemption guidance for the full list before you call or write.
How to apply for an MTD exemption
You apply by phone or in writing, and a friend or family member can apply for you if you give them written or spoken authorisation.
- Check that your reason is one HMRC accepts, using the lists above and the GOV.UK exemption guidance.
- Have your National Insurance number, your name and address, and your reasons ready.
- Call or write to HMRC using the contact details on the Self Assessment: general enquiries page. Agents use the Agent Dedicated Line.
- If you write, use HMRC’s subject heading for a Making Tax Digital for Income Tax digitally excluded application, or for an exemption application if your reason is different. The exact wording is on GOV.UK.
When to apply and how long a decision takes
HMRC says you should apply before you need to use Making Tax Digital for Income Tax. If you start in 2026 or 2027, apply now. If you would start on 6 April 2028, apply from summer 2027 onwards.
HMRC aims to respond within 28 calendar days of receiving your application. It may take longer if HMRC needs more information from you. If you disagree with the decision, you can appeal in writing to the address in the decision letter, up to 30 days after the date on the letter.
- Rent received on the 2025 to 2026 return
- £34,000
- Allowable expenses
- £6,000
- Profit
- £28,000
- Qualifying income
- £34,000, more than £30,000
- Date MTD would apply
- 6 April 2027
- Action
- A sight condition stops her using a computer, so she phones HMRC now
Fictional example. Her reason is a health condition, which HMRC accepts. Profit is shown for completeness, but the test uses income before expenses.
What happens while you wait for a decision
If you have already signed up, or HMRC has signed you up, GOV.UK says you should continue to use Making Tax Digital for Income Tax while you wait to hear back. You must also keep records or supporting documents as you normally would for Self Assessment.
If HMRC has signed you up and you think you should not need to use MTD, contact Self Assessment: general enquiries. That is also the route to apply for an exemption if you think you are digitally excluded.
If you are exempt during the 2026 to 2027 tax year, you stay on the current Self Assessment late payment and late filing penalties rather than the new MTD penalties.
If you simply prefer a spreadsheet or paper
Preferring paper or a spreadsheet is not a reason HMRC accepts on its own. If you are comfortable with a spreadsheet, GOV.UK says you can keep using it and connect it to bridging software that sends your updates and tax return.
Bridging software reads the totals from your spreadsheet, so your way of keeping records stays much the same. SimpleTaxFlow is one of the products on HMRC’s list that works this way.
New exemptions announced at Budget 2026
At Budget 2026 on 28 October 2026, the government announced that it will exempt three groups from Making Tax Digital for Income Tax until further notice: people eligible for qualifying care relief, non-UK resident foreign entertainers and sportspeople, and “expected non-resident customers”.
These exemptions are announced, not yet law. Secondary legislation is due before April 2027, and they are not yet in HMRC’s exemption guidance. Until they are, use the current rules above.
Frequently asked questions
Who is automatically exempt from MTD for Income Tax?
You are automatically exempt if your qualifying income is £20,000 or less or you had no National Insurance number before the tax year started. Trusts, non-resident companies, personal representatives and some people whose 2024 to 2025 return showed particular pages or reliefs are also exempt. Some of these exemptions are temporary.
What counts as digitally excluded for MTD?
You are digitally excluded if it is not reasonable for you to use software because of your age, a health condition or disability, your religious beliefs, or because you have no internet access at home or at your business and no suitable alternative.
How do I apply for an MTD exemption?
You phone or write to HMRC using the contact details on the Self Assessment: general enquiries page. Give your National Insurance number, name, address and your reasons. Agents use the Agent Dedicated Line.
How long does HMRC take to decide an exemption?
HMRC aims to respond within 28 calendar days of receiving your application, or longer if it needs more information. You can appeal in writing up to 30 days after the date on the decision letter.
Can I get an exemption because I do not like software?
No. HMRC refuses an application if the only reason is that you are unfamiliar with accountancy software, used paper before, have few records, or that it would cost extra time or money.
Do I still send a tax return if I am exempt from MTD?
Yes. An exemption only removes the Making Tax Digital requirements. You must still report your income and gains on a Self Assessment tax return as normal.
Check the official rules
Tax rules can change and your circumstances matter. Use HMRC’s current guidance to confirm what applies to you.
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