Guides › MTD Exemptions: Are You Exempt and How to Apply

MTD Exemptions: Are You Exempt and How to Apply

Short answer: Some people are exempt from MTD for Income Tax. Exemptions are either automatic (HMRC applies them from information it holds) or you must apply. If you are exempt you still file a Self Assessment return as normal.

Automatic, permanent (unless circumstances change)

• Qualifying income of £20,000 or less.
• No National Insurance number before the start of the tax year (you cannot sign up).
• Role-based: non-resident companies submitting SA700; trusts submitting SA900; personal representatives of someone who has died (outstanding returns must be completed). If you have your own personal self-employment or property income you may still need MTD for that.
• Included on your 2024 to 2025 return: SA103L as a Lloyd's member for underwriting business; or that you are not physically or mentally capable of providing information to HMRC and have a UK power of attorney in place or a legally appointed deputy, controller or guardian.

Automatic, until April 2027

If your 2024 to 2025 return included any of these, you do not need MTD for 2026 to 2027:

• averaging relief on SA103 as an individual (farmer, market gardener, or creator of literary or artistic works);
• qualifying care relief (for example foster carers);
• SA107 (trusts or estates income);
• SA109 supplementary page.

GOV.UK says that if your qualifying income for 2025 to 2026 is above £30,000 you will need MTD from the 2027 to 2028 tax year onwards.

Automatic, beyond April 2027

SA102M (ministers of religion); SA103L Lloyd's members with self-employment or property income; Married Couple's Allowance (born before 6 April 1935); Blind Person's Allowance. GOV.UK says you will need MTD in future and will set out the timeline later.

Exemptions you must apply for

• Digitally excluded: it is not reasonable for you to use compatible software to keep digital records or send updates or returns. Examples on GOV.UK: age, health or disability; religious beliefs incompatible with digital communication and you use no computer, tablet or smartphone; no internet access at home or business and no suitable alternative.
• Temporary (to April 2027): if your 2024 to 2025 return lacked the relief or page but you reasonably expect your 2025 to 2026 or 2026 to 2027 return to include it (averaging relief, qualifying care relief, SA107, SA109), or as a partner you claim averaging relief on SA104.
• Beyond April 2027: you expect Married Couple's Allowance, Blind Person's Allowance, or SA102M in those returns.

Do not apply without a good reason to think the claim or page will appear.

What HMRC will not accept as the only reason

• you previously filed a paper return;
• you are unfamiliar with accounting software;
• you have few digital records to create each year;
• it will take extra time or cost to use MTD.

HMRC considers digital exclusion on a case-by-case basis. An agent, friend or family member can apply for you, but the decision is based on your circumstances.

VAT exemptions

GOV.UK says that if you are exempt from sending online VAT returns under MTD for VAT, you should contact HMRC when the exemption application process opens for MTD for Income Tax. If your VAT exemption is due to insolvency, you are not exempt from MTD for Income Tax.

If you become exempt

Exemption changes which penalties apply (see the penalties page): see MTD penalties.

FAQ

I'm exempt: do I still file a return? Yes, as normal.

Can I apply for a temporary exemption "just in case"? GOV.UK says not without a good reason.

Does a small number of transactions exempt me? No, not on its own.

Where do I apply? GOV.UK's exemption page explains the process; we have not verified the application steps.

What we could not verify

• The detailed application steps and processing times (not read on GOV.UK).
• How HMRC will decide specific digital-exclusion cases.
• Exemptions after April 2027 are described by GOV.UK as future timeline to be set.

Sources (GOV.UK / HMRC)

• GOV.UK, Find out if you can get an exemption from Making Tax Digital for Income Tax — https://www.gov.uk/guidance/find-out-if-you-can-get-an-exemption-from-making-tax-digital-for-income-tax (last updated 28 May 2026; read 17 October 2026)
• GOV.UK, Find out if and when you need to use Making Tax Digital for Income Tax — https://www.gov.uk/guidance/check-if-youre-eligible-for-making-tax-digital-for-income-tax (page last updated 26 March 2026; read 17 October 2026)

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Not tax advice. Examples use made-up figures. Nothing here has been reviewed by a tax professional. See the disclosure.