Plenty of people who think they are stuck with Making Tax Digital for Income Tax are not. Some exemptions are automatic and need no contact with HMRC at all. Others have to be applied for, and the window for the £30,000 cohort is open now.
One thing every exemption has in common: being exempt does not mean you stop filing. You continue to report your income and gains in a Self Assessment tax return as normal.
Two kinds of exemption
Automatic exemptions are given by HMRC from information it already holds — no contact, no application. Exemptions you apply for require you to write or call and explain why you qualify. Either type can be permanent, unless your circumstances change, or temporary, lasting until April 2027 at the earliest.
Automatic exemptions: nothing to do
Partnerships
Partnerships do not currently need to use Making Tax Digital for Income Tax. HMRC has said it will set out a timeline in future but has not published one.
Note the boundary. Your share of partnership profit as an individual partner does not count towards qualifying income and needs no digital records or quarterly updates — but you still report it on your tax return, and personal self-employment or property income is assessed separately.
Qualifying income of £20,000 or less
If your qualifying income is £20,000 or less, you are automatically exempt. This is permanent unless your circumstances change, and it is the floor of the regime as currently legislated.
No National Insurance number
If you do not have a National Insurance number before the start of the tax year, you are automatically exempt and cannot sign up. Receive one on 30 April 2026 with 2024/25 qualifying income over £50,000, and you are exempt for the whole of 2026/27.
Role-based exemptions
Automatically exempt where you file on behalf of an entity: non-resident companies submitting an SA700, trusts and estates submitting an SA900 (including charitable trusts and trusts of non-registered pension schemes), and personal representatives of someone who has died. Your own self-employment or property income is assessed separately.
Capacity and Lloyd’s underwriting
You are automatically exempt if your 2024/25 return declared that you are not physically or mentally capable of providing information to HMRC and you have a UK power of attorney, or a legally appointed deputy, controller or guardian. Including the SA103L page as a Lloyd’s member in relation to your underwriting business also exempts you.
Automatic, but only until April 2027
You do not need to use MTD for 2026/27 if your 2024/25 return included any of:
- averaging relief on the SA103 page as an individual (farmers, market gardeners, and people who personally create literary or artistic works)
- qualifying care relief — foster carers, kinship carers
- the SA107 page reporting income from trusts or estates
- the SA109 residence and remittance basis page
These fall away for 2027/28 onwards if your qualifying income was above £30,000 in 2025/26.
Automatic, and lasting beyond April 2027
Automatically exempt if your 2024/25 return included:
- the SA102M page as a Minister of religion of any faith, religion or denomination
- the SA103L page as a Lloyd’s member with self-employment or property income
- a declaration that you received or transferred Married Couple’s Allowance (born before 6 April 1935) or Blind Person’s Allowance
HMRC will set out a future timeline for these groups.
Exemptions you have to apply for
Digital exclusion
The headline exemption, and the most misunderstood. Being digitally excluded means it is not reasonable for you to use compatible software to keep digital records and make submissions. HMRC gives three example grounds:
| Ground | What it covers |
|---|---|
| Age, health or disability | A condition or disability that stops you using a computer, tablet or smartphone to keep or submit digital records |
| Religious belief | 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 |
| Location | You cannot get internet access at home or at your business because of where it is, and cannot get access at a suitable alternative location |
Every application is considered case by case, and there may be other reasons.
What HMRC will not accept. Four grounds are refused outright if that is your only reason: you previously filed on paper; you are unfamiliar with accountancy software; you have few digital records to create each year; or it will take extra time or cost to comply.
The agent point that undercuts most applications. HMRC states directly that if your agent uses compatible software to keep digital records and submit them, they meet the MTD requirements on your behalf — so you may not need a digital exclusion exemption at all. Speak to your accountant first. And where anyone applies for you, the exemption is judged on your personal circumstances, not theirs.
Already exempt from MTD for VAT? If HMRC previously confirmed you are digitally excluded for VAT, contact Self Assessment general enquiries rather than applying afresh — if nothing has changed, HMRC will confirm the Income Tax exemption too. A VAT exemption granted because of an insolvency procedure does not carry across.
Forward-looking versions of the temporary exemptions
If your 2024/25 return did not include one of the items above but you reasonably expect your 2025/26 or 2026/27 return to, you must apply. Partners claiming averaging relief on the SA104 page must apply in all cases. HMRC warns against applying speculatively: do not apply unless you have good reason to think the claim or page will appear on your return.
How to apply, and what happens next
There is no online form. You must call or write to HMRC using the Self Assessment general enquiries contact details. Agents use the Agent Dedicated Line. If you write, title your letter “Making Tax Digital for Income Tax — digitally excluded application” or “— exemption application”.
What to include: your National Insurance number, name and address, and why you should be exempt. For digital exclusion, also give details of how you currently submit a tax return and whether anyone helps, your reasons with supporting information, whether you have an agent and what they will do, and any additional needs. Applying on more than one ground? One application covers them all.
When to apply. The 6 April 2026 and 6 April 2027 cohorts can apply now. The 6 April 2028 cohort should apply from summer 2027 onwards.
What happens while you wait. HMRC aims to respond within 28 calendar days, longer if it needs more information. If you have already signed up and your circumstances have changed, keep using Making Tax Digital while you wait. Either way, carry on keeping records as you normally do for Self Assessment.
If HMRC accepts. You get a letter explaining the type of exemption and how long it lasts. If you are exempt for 2026/27, you stay on the current Self Assessment late filing and late payment penalties rather than the new points-based regime.
If HMRC refuses. The letter explains why and how to appeal. You have 30 days from the date on it, and the appeal must be in writing, titled “— digitally excluded appeal” or “— exemption appeal”, with any new information.
Frequently asked questions
If I’m exempt from MTD, do I still file a tax return?
Yes. Exemption removes the digital record keeping and quarterly updates, not the return. You continue to report your income and gains in a Self Assessment tax return as normal.
Can I get an exemption just because I’m not confident with software?
No. HMRC will refuse an application if the only reason is that you previously filed a paper return, you are unfamiliar with accountancy software, you have few digital records, or it will take extra time or cost to comply.
How long does an MTD exemption application take?
HMRC aims to respond within 28 calendar days of receiving your application, and longer if it needs more information from you. If you have already signed up, keep using Making Tax Digital while you wait.
Are partnerships exempt from Making Tax Digital for Income Tax?
Partnerships do not currently need to use it, and HMRC has not published a timeline for when they will. Your share of partnership profit as an individual partner does not count towards qualifying income, but you still report it on your tax return.
What happens if my exemption application is refused?
Your decision letter will explain why and how to appeal. You have 30 days from the date on the letter, and the appeal must be in writing with any new information you want HMRC to consider.
If you would rather not test the exemption
The digital exclusion route is narrow by design, and HMRC’s own guidance notes that an agent using compatible software on your behalf meets the requirements without any exemption — usually a faster answer than a 28-day application.
SmartFiling handles MTD for Income Tax and Self Assessment on a fixed fee, running compatible software on your behalf, with nothing for you to install. Every submission is reviewed by an ICAEW Chartered Accountant, turnaround is three weeks, and no phone calls are required.
