MTD for Income Tax exemptions: who is exempt and how to apply
Short answer: Some people are exempt from Making Tax Digital (MTD) for Income Tax automatically, based on HMRC’s records, and need to do nothing. Others, mainly people who are digitally excluded, must apply to HMRC by phone or post. Being exempt does not remove your tax duties: you still report income and gains on a Self Assessment return.
Not sure whether MTD applies to you at all? Start with the MTD checker.
Two kinds of exemption
GOV.UK splits exemptions by how you get them and how long they last.
| Automatic | Apply for | |
|---|---|---|
| How | HMRC applies it from its records | You send HMRC an application with reasons |
| Contact HMRC? | No | Yes |
| Examples | No National Insurance number, trusts, personal representatives | Digitally excluded, certain temporary and deferred cases |
Exemptions are also either permanent (they last unless your circumstances change) or temporary (until April 2027 at the earliest).
Automatic exemptions
GOV.UK lists these as automatic, so you do not apply. Many are judged from what was on your 2024-25 Self Assessment return.
Permanent, unless your circumstances change:
- Qualifying income of £20,000 or less.
- You had no National Insurance number before the start of the tax year. Example from GOV.UK: you get your number on 30 April 2026 and your qualifying income for 2024-25 was over £50,000, so you are exempt for 2026-27.
- Non-resident companies that file an SA700.
- Trusts that file an SA900, including charitable trusts and trusts of non-registered pension schemes.
- Personal representatives of someone who has died, for any outstanding returns. Your own self-employment or property income may still need MTD.
- Lloyd’s members with underwriting business, shown on an SA103L.
- People who cannot give information to HMRC because of physical or mental capacity, and who have either a current power of attorney held by someone in the UK or a legally appointed deputy, controller or guardian.
Temporary, until April 2027, if your 2024-25 return included averaging relief as an individual (SA103), qualifying care relief (for example foster or kinship carers), or the SA107 or SA109 pages. From 2027-28 you will need MTD if your qualifying income was above £30,000 in 2025-26. See MTD from April 2027.
Partnerships do not currently need to use MTD for Income Tax. HMRC has said it will set out a timeline later.
Deferred groups
Some groups are not exempt for good. GOV.UK says they will need MTD in future, with HMRC to announce the timeline later. If your 2024-25 return included any of these, no application is needed:
- Ministers of religion (SA102M).
- Lloyd’s members with self-employment or property income (SA103L).
- Married Couple’s Allowance, received or transferred, for people born before 6 April 1935.
- Blind Person’s Allowance, received or transferred.
If you did not claim these in 2024-25 but reasonably expect to in 2025-26 or 2026-27, GOV.UK says you apply instead. Do not apply without a good reason.
Exemptions you apply for: digital exclusion
You may be digitally excluded if it is not reasonable for you to use compatible software to keep digital records, send quarterly updates or file your return. GOV.UK gives three examples:
- Age, health or disability. Your age, a health condition or a disability stops you using a computer, tablet or smartphone to keep records or send them.
- Religious objection. You are a practising member of a religious society or order whose beliefs are incompatible with digital communications or records, and you do not use a computer, tablet or smartphone for business or personal use.
- Location. You cannot get internet access at home or at your business because of where you are, and you cannot reach it from a suitable alternative place.
So “MTD exemption age” is not a rule such as “over 70 is exempt”. Age counts only if it stops you using a device to keep or send records. HMRC decides each case on your own circumstances, including when an agent, friend or family member applies for you. Other reasons are assessed case by case too.
GOV.UK says these are not accepted as the only reason:
- You filed a paper return before.
- You are not familiar with accounting software.
- You have few digital records each year.
- Signing up and using MTD would take extra time or cost.
If HMRC already confirmed you are exempt from MTD for VAT because you are digitally excluded, GOV.UK has a separate route. Contact Self Assessment general enquiries with your National Insurance number, VAT registration number, the reason and whether things have changed. If nothing has changed, HMRC confirms the Income Tax exemption too. If something has changed, you apply.
How to apply
GOV.UK says you must call or write to HMRC. Its guidance does not describe an online form. The phone number and hours are on the HMRC “Self Assessment: general enquiries” page. Agents use the Agent Dedicated Line.
You can apply for yourself, or an authorised agent can. A friend or family member can too, with your authorisation, given in writing with your signature or by phone with you present.
For a written application, GOV.UK gives subject titles that start “Making Tax Digital for Income Tax”, followed by either “digitally excluded application” or “exemption application”. HMRC asks for:
- Your National Insurance number, name and address.
- Why you think you should be exempt, with supporting information.
- For digital exclusion: how you file now, why you are digitally excluded, any agent and their role, and any additional needs.
If someone applies for you, they also say how they are connected to you. HMRC may ask for more information and may check what you provide. If a health condition or personal circumstances make contact hard, GOV.UK points to its guidance on getting extra support from HMRC.
When to apply
Apply before you need to use MTD for Income Tax. If you need it from 6 April 2027, you can apply now. If you need it from 6 April 2028, GOV.UK says to apply from summer 2027.
How long a decision takes
HMRC aims to respond within 28 calendar days of receiving your application. It can take longer if HMRC needs more information.
While you wait
GOV.UK says to keep your records and supporting documents as you normally would for Self Assessment, and to read the MTD steps guidance so you are ready if you are refused. If you are already signed up and your circumstances change, apply and keep using the service while you wait.
If you are accepted
HMRC’s letter states the type of exemption and how long it lasts. If you are exempt until April 2027, you will not need to sign up before the 2027-28 tax year at the earliest. In 2026-27 the usual Self Assessment late filing and late payment penalties still apply. See MTD penalties.
If you are refused
The decision letter explains the reasons and how to appeal. You have 30 days from the date on the letter. If you need more time, call or write to Self Assessment general enquiries (agents use the Agent Dedicated Line). Send a written appeal to the address in the letter, with any new information, using a subject title that starts “Making Tax Digital for Income Tax” followed by “digitally excluded appeal” or “exemption appeal”.
What exempt people still do
Exempt people do not use the MTD service, but they still report income and gains on a Self Assessment return as normal. If you are not exempt, the next questions are whether your qualifying income is over the threshold, and what the final declaration involves. People with a job and a side business can see sole trader and landlord rules for several income sources.
If the exemption does not apply, tools like SendMTD are being built to turn a bank statement CSV into quarterly totals. It is not live yet and is not HMRC recognised. See software options.
Sources
This guide is general information, not tax or legal advice. Rules can change: check GOV.UK or speak to an accountant about your situation. SendMTD is not affiliated with HMRC.