Can I be exempt from Making Tax Digital?

Yes, in some cases. Qualifying income of £20,000 or less is automatically exempt. Otherwise you can apply, for example if you are digitally excluded, and for an April 2027 start you can apply now.

Making Tax Digital for Income Tax (MTD) means keeping digital records and sending HMRC quarterly updates from compatible software. Some people are taken out of it without asking. Others have to apply and explain why. The rules below follow GOV.UK as checked on 16 October 2026.

Automatic exemptions: nothing to apply for

HMRC gives these based on what it already holds, mostly your 2024-25 tax return. You do not need to contact anyone.

At the Budget on 28 October 2026 the government said three groups will be exempt until further notice: people eligible for qualifying care relief (such as foster carers), non-UK resident entertainers and sportspeople, and people expected to be non-resident. Regulations are due before April 2027, so check GOV.UK for how it will work.

Partnerships do not need to use MTD yet either. A partner's own sole-trade or rental income can still be in scope.

Digital exclusion: the exemption you apply for

You can apply if it is not reasonable for you to use compatible software to keep digital records or send updates. GOV.UK gives these examples:

• your age, a health condition or a disability stops you using a computer, tablet or smartphone for this
• you belong to a religious society whose beliefs rule out digital communications, and you do not use these devices for business or personal use
• you cannot get internet access at home or work because of where you are, and cannot get it at a suitable place nearby

HMRC will not accept an application if your only reason is that you filed on paper before, are unfamiliar with accounting software, have only a few records, or that MTD will take extra time or money. Each application is decided case by case.

There is a point here worth weighing up. GOV.UK says that if an agent keeps your digital records in compatible software and sends them to HMRC, they meet the MTD rules for you, so you may not need an exemption at all.

What this means for you

For most tradespeople and landlords over the threshold, an exemption is unlikely. Finding software awkward, or having a quiet year of paperwork, is not enough. The realistic options are doing it yourself with software, or having someone do it for you.

If you have a genuine reason, apply early. If you start MTD on 6 April 2027, you can apply now. If you start on 6 April 2028, GOV.UK says to apply from summer 2027. While you wait, keep your records as normal and get ready to sign up in case the answer is no. If HMRC refuses, you can appeal in writing within 30 days of the date on the letter.

An exemption does not take you out of Self Assessment. You still file a tax return every year. From April 2027 the new points-based penalties apply to everyone who files a personal return, whether in MTD or not.

Steps to apply for an exemption

1. Check whether you are already automatically exempt, using the table above and the free MTD check.
2. Gather your National Insurance number, name and address.
3. Write down why you are digitally excluded, how you file your tax return now, who helps you, whether you have an agent and what they do, and any extra support you need. Add evidence if you have it.
4. Call or write to HMRC using the Self Assessment general enquiries contact details on GOV.UK. If writing, use the heading "Making Tax Digital for Income Tax — digitally excluded application".
5. Keep your records as usual while you wait. HMRC aims to reply within 28 calendar days.
6. If refused and you disagree, appeal in writing within 30 days, using the heading "Making Tax Digital for Income Tax — digitally excluded appeal".

A friend or family member can apply for you with your authorisation, given by letter with your signature or by phone with you present. For more guides, visit the trades section or the landlord section.