MTD for Income Tax exemptions: who's exempt and how to apply

Written by the Quidtrail team · Facts last checked 18 October 2026

The short answer: you're exempt from Making Tax Digital for Income Tax if, for example, your qualifying income is £20,000 or less, you have no National Insurance number, or you're digitally excluded (it isn't reasonable for you to use software because of age, health, disability, location or religious beliefs). Some exemptions are automatic. Others, including digital exclusion, you have to apply for by phoning or writing to HMRC. Being exempt doesn't mean no tax return: you still file Self Assessment as normal (GOV.UK).

Two types of exemption

• Automatic: HMRC gives these based on information it already holds, so you don't need to do anything.
• Apply for: you contact HMRC and explain why you're exempt.

Each type can be permanent (unless your circumstances change) or temporary (lasting until April 2027 at the earliest) (GOV.UK).

Automatic exemptions

Being in a role-based group, such as a trustee or personal representative, doesn't exempt your own self-employment or property income (GOV.UK).

Partnerships don't need to use MTD yet (GOV.UK).

Lloyd's members: permanent or beyond April 2027?

HMRC's exemptions page (last updated 28 May 2026) mentions the SA103L page in two places (GOV.UK):

• under permanent automatic exemptions: "the SA103L supplementary page as a Lloyd's member in relation to your underwriting business"
• under automatic exemptions that last beyond April 2027: "the SA103L supplementary page because you are a Lloyd's member with self-employment or property income", with HMRC saying "You will need to use Making Tax Digital for Income Tax in the future"

Both entries mean you don't need MTD now if your 2024 to 2025 return included SA103L, and you don't have to apply. If you also have self-employment or property income outside your Lloyd's underwriting, plan on the basis that HMRC may bring that income into MTD later, and check with HMRC or your adviser. The page doesn't list an application route for Lloyd's members whose SA103L first appears on a later return.

Exemptions you need to apply for

Digitally excluded

HMRC says you're digitally excluded if it isn't reasonable for you to use compatible software to keep digital records, send quarterly updates or submit your tax return. Examples include (GOV.UK):

• your age, health condition or disability stops you using a computer, tablet or smartphone for this
• you're a practising member of a religious society or order whose beliefs are incompatible with digital communications or records, and you don't use these devices for business or personal use
• you can't get internet access at home or at your business because of where you are, and can't get it at a suitable alternative location

Reasons HMRC won't accept on their own:

• you used to file a paper return
• you aren't familiar with accounting software
• you only have a few records to create each year
• it will cost you extra time or money

Already exempt from MTD for VAT because you're digitally excluded? Contact HMRC with your NI number, VAT number and the reason. If nothing has changed, HMRC will confirm you're exempt from MTD for Income Tax as well. This doesn't apply if your VAT exemption was because of insolvency (GOV.UK).

Have an accountant? If your agent keeps digital records and submits them using compatible software, they can meet the MTD requirements for you, so you may not need to apply for this exemption (GOV.UK).

Temporary exemptions you apply for (until April 2027)

You apply if your 2024 to 2025 return didn't include these, but you reasonably expect your 2025 to 2026 or 2026 to 2027 return to include: averaging relief (SA103, as an individual), qualifying care relief, SA107, or SA109. SA109 covers things like being non-resident, dual residence, split year treatment, overseas workday relief or the foreign income and gains regime. Partners claiming averaging relief: since 28 May 2026, HMRC's guidance says that if you're a partner who would otherwise need MTD, you have to apply (it isn't automatic) if you claimed averaging relief on the SA104 partnership page in your 2024 to 2025 return, or reasonably expect to on your 2025 to 2026 or 2026 to 2027 return. This exemption lasts until April 2027 (GOV.UK). The automatic exemption for averaging relief covers only claims made on SA103 as an individual.

Longer exemptions you apply for (beyond April 2027)

You apply if you expect your 2025 to 2026 or 2026 to 2027 return to claim Married Couple's Allowance or Blind Person's Allowance, or to include SA102M (minister of religion) (GOV.UK).

HMRC says not to apply unless you have a good reason to expect this (GOV.UK).

How to apply

1. When: before you need to start MTD. If you start on 6 April 2026 or 6 April 2027, you can apply now. If you start on 6 April 2028, apply from summer 2027 onwards (GOV.UK).
2. How: phone or write to HMRC using the contact details on Self Assessment: general enquiries. Agents use the Agent Dedicated Line. If you write, use the subject line "Making Tax Digital for Income Tax — digitally excluded application", or "— exemption application" for any other exemption.
3. What to include: your NI number, name and address, and why you think you're exempt. For digital exclusion, also include how you file now (and whether someone helps you), why you're digitally excluded, whether you have an agent and what they do, and any extra support needs. If more than one exemption applies, put them all in one application.
4. Who can apply: you, an authorised agent, or a friend or family member with your authorisation (given in writing with your signature, or by phone with you present).

Source: GOV.UK.

After you apply: HMRC aims to reply within 28 calendar days. In the meantime, keep preparing for MTD in case it says no, and keep your normal Self Assessment records. If you're refused, you can appeal within 30 days of the date on the letter (GOV.UK).

Already signed up? Apply, but keep using MTD while you wait for HMRC's decision (GOV.UK).

What changes if you're exempt

• You don't need to keep digital records or send quarterly updates.
• You still report your income and gains on a Self Assessment return.
• Your penalty regime may change (GOV.UK). If you're exempt during 2026 to 2027, you stay on the current Self Assessment penalties (GOV.UK). From 2027 to 2028, see the new Self Assessment penalties.

Related: Do I need MTD? · MTD for Income Tax guide · MTD penalties

Last checked against GOV.UK on 18 October 2026. Not tax advice.