Not everyone has to use Making Tax Digital (MTD) for Income Tax. HMRC says some people are exempt automatically, and others can apply for an exemption, most often because they are digitally excluded. An exemption is not the same as opting out, and it is not the same as simply not wanting to comply. If you are unsure of your position, check HMRC's current guidance on GOV.UK.
Can You Be Exempt from MTD?
Yes, if you meet HMRC's exemption rules. HMRC says you may be exempt for different reasons. If you are exempt, you do not have to use MTD for Income Tax, but you must still report your income and gains in a Self Assessment tax return.
There are two types:
Automatic exemptions: HMRC gives these based on the information it holds, so you do not need to contact HMRC.
Exemptions you apply for: You contact HMRC and explain why you are exempt.
Exemptions can be permanent (unless your circumstances change) or temporary (lasting until April 2027 at the earliest).
Not required yet is different from exempt. MTD for Income Tax applies if you are a sole trader or landlord registered for Self Assessment, you have self-employment or property income, and your qualifying income is over the relevant threshold. HMRC's start dates are:
Qualifying income | Tax year checked | Must use MTD from |
|---|---|---|
over £50,000 | 2024 to 2025 | 6 April 2026 |
over £30,000 | 2025 to 2026 | 6 April 2027 |
over £20,000 | 2026 to 2027 | 6 April 2028 |
HMRC has a separate page explaining how qualifying income is worked out, and an online tool to check whether and when MTD applies to you.
Who Can Get an MTD Exemption?
This summarises HMRC's guidance. Your position depends on what was in your 2024 to 2025 tax return, so read the full GOV.UK page too.
Permanent Automatic Exemptions (Unless Your Circumstances Change)
Qualifying income of £20,000 or less.
No National Insurance number before the start of the tax year.
Personal representatives of someone who has died (outstanding returns must still be completed).
Non-resident companies submitting an SA700, and trusts submitting an SA900.
People who said in their 2024 to 2025 return that they 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.
Ministers of religion (SA102M), Lloyd's members (SA103L), and people who received or transferred Married Couple's Allowance (born before 6 April 1935) or Blind Person's Allowance. HMRC says some of these will need to use MTD in future, with a timeline to be set.
Partnerships do not currently need to use MTD. HMRC says it will set out a timeline later.
Automatic Exemptions Until April 2027
You do not need MTD for 2026 to 2027 if your 2024 to 2025 return claimed averaging relief (as a farmer, market gardener or creator of literary or artistic works), claimed qualifying care relief (such as foster carers), or included the SA107 or SA109 supplementary pages. HMRC says you need MTD from 2027 to 2028 if your qualifying income is above £30,000 in 2025 to 2026.
Exemptions You Must Apply For
Digital exclusion: Covered in the next section.
The exemptions above, when they weren't in your 2024 to 2025 return: You must apply if you reasonably expect them to appear in your 2025 to 2026 or 2026 to 2027 return. HMRC says not to apply unless you have a good reason.
Partners claiming averaging relief on the SA104 page.
If you think several exemptions apply, HMRC asks for a single application explaining each one.
MTD Exemption for Digital Exclusion
Digital exclusion means it is not reasonable for you to use compatible software to keep digital records, send quarterly updates or submit your tax return.
Examples HMRC Gives
Your age, a health condition, or a disability stops you from using a computer, tablet, or smartphone to keep digital records or submit them to HMRC.
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.
You cannot get internet access at home or at your business because of your location, and cannot get it at a suitable alternative location.
What HMRC Will Not Accept
HMRC will not accept your application if the only reason is:
You previously filed a paper return.
You are unfamiliar with accountancy software.
You have a small number of digital records to create each tax year.
It will take extra time or cost to sign up to and use MTD.
HMRC also says there may be other reasons someone is or isn't digitally excluded, and it considers all applications on a case-by-case basis.
If Someone Helps You
The exemption is based on your personal circumstances, even if an agent, friend or family member applies for you. HMRC also says that if your agent uses compatible software to keep your digital records and submit them, the agent can meet MTD requirements on your behalf, so you may not need a digital exclusion exemption. HMRC asks you to explain how you currently submit your return (including whether someone helps) and whether you have an agent and what they will do.
Is It Permanent?
HMRC says a digitally excluded exemption may be permanent, depending on your circumstances. If a granted exemption ceases, or your circumstances change so that you can keep digital records and send quarterly updates, you need to tell HMRC. If you believe you should still be exempt, you can re-apply by phone or in writing.
Do You Need Evidence for an MTD Exemption?
HMRC asks you to explain why you should be exempt and include any additional information that supports your application. It may request more to reach a decision, and it may verify what you have told it.
There is no fixed evidence checklist in the HMRC guidance reviewed, so none is listed here. For digital exclusion, HMRC specifically asks you to tell it:
How you currently submit a tax return, including if someone else helps.
The reason you think you are digitally excluded, and any supporting information.
Whether you have an agent (for example, an accountant) and what they will do.
Any additional needs, so HMRC can provide the right support.
How to Apply for an MTD Exemption
Step 1: Check Whether You Need to Apply
Use HMRC's checker and exemptions guidance. Automatic exemptions need no application.
Step 2: Gather Your Details
You need your National Insurance number, name and address, and your explanation.
Step 3: Call or Write to HMRC
You must call or write to Self Assessment general enquiries. Agents use the Agent Dedicated Line. Find the details on GOV.UK. No online form is described in the guidance.
If you write, HMRC requires a subject title. For digital exclusion, it is "Making Tax Digital for Income Tax", then "digitally excluded application". For any other exemption, it ends with "exemption application". Copy the exact wording from GOV.UK. If a health condition or personal circumstances make it hard to contact HMRC, it has a page on getting extra support.
Someone else can apply for you if they are an authorised agent, or a friend or family member with your authorisation (in writing with your signature, or by phone with you present).
Step 4: Apply Before You Need MTD
HMRC says to apply before you are required to use it. Its GOV.UK page, updated 17 August 2026, says:
If you need MTD from 6 April 2026 or 6 April 2027, you can apply now.
If you need it from 6 April 2028, apply from summer 2027 onwards.
Step 5: Wait for HMRC's Decision
HMRC aims to respond within 28 calendar days, though it may take longer if it needs more information. It will send a letter saying whether it accepted the application and what to do next.
What Happens While HMRC Considers Your Exemption?
HMRC's guidance does not say that applying pauses your MTD obligations.
Already signed up, and your circumstances changed: HMRC says to apply for an exemption and continue using MTD while you wait to hear back.
Not yet signed up: HMRC's application page says to read its step-by-step MTD guidance, which will help you prepare to sign up and use MTD if your application is not accepted. It also says to keep your Self Assessment records as normal. No HMRC wording was found that gives a rule for deadlines falling during the decision period.
Deadlines: For 2026 to 2027, there are no penalties for missing a quarterly update deadline, but you still need to send quarterly updates before you can submit your tax return. The quarterly deadlines are 7 August, 7 November, 7 February and 7 May. The tax return and payment deadline is 31 January after the end of the tax year.
If accepted: The letter explains the type and length of the exemption. If it lasts until April 2027, you need not use MTD until 2027 to 2028 at the earliest. During 2026 to 2027, you stay on the current Self Assessment late-filing and late-payment penalties. If you are exempt in 2027 to 2028, HMRC says the new penalties apply, and your penalty point threshold drops from 4 to 2.
If a deadline is close and you have no decision, contact HMRC using the details on GOV.UK, or speak to a tax adviser. Do not assume that applying means you can stop.
Can You Opt Out of MTD?
"Opt out" has a specific meaning in HMRC's guidance. It does not mean you can simply choose to leave.
Situation | Can you simply opt out? | What to do |
|---|---|---|
You are mandated to MTD | No. HMRC's developer guidance says mandated customers are not eligible to opt out. | Use MTD, unless you are exempt or meet the income-based opt-out tests. |
You qualify for an exemption | Not an opt-out. An exemption is automatic or confirmed by HMRC. | Apply if it is not automatic. Once HMRC confirms, you no longer create digital records or send quarterly updates, but you still file a Self Assessment return. |
You have applied for an exemption | HMRC does not say applying ends your obligations. | Follow the pending guidance above. |
You joined MTD voluntarily | Yes, per HMRC (see below). | Use your HMRC online services account. |
Your circumstances changed | Depends. | Income fell: opt out only if eligible. Newly digitally excluded: apply and keep using MTD while you wait. |
Opting Out Because Your Income Is Lower
If you have been using MTD, HMRC says you can opt out if you amended your previous year's Self Assessment return so your qualifying income is below the relevant threshold, or your qualifying income has been below it for 3 consecutive years. The option appears in your HMRC online services account only if you are eligible. If you opt out, you no longer create digital records or send quarterly updates; HMRC deletes updates already sent for that tax year, and you must send a Self Assessment return for that year.
Can You Leave MTD if You Signed Up Voluntarily?
Yes. HMRC's developer guidance says voluntary customers can leave (opt out) at any time through their HMRC online services account. HMRC's manual says that if you signed up voluntarily and think you have become exempt, you should opt out using that account.
What HMRC says about leaving:
Eligibility is decided tax year by tax year. Someone can be mandated for one year and voluntary the next.
Updates already sent for the year you opt out are deleted.
You must send a Self Assessment return for that year.
Penalties do not revert. HMRC's volunteer penalty guidance says you cannot go back to the previous penalties once you have agreed to the new ones, even if you stop volunteering.
Leaving does not decide future obligations. HMRC says to check again if and when you need to use MTD.
If you volunteered and later need to use MTD, late quarterly updates from 2027 to 2028 earn penalty points, and the threshold rises from 2 to 4 points.
What if You Do Not Qualify for an MTD Exemption?
If you are required to use MTD and are not exempt, HMRC expects you to comply. HMRC will not accept an application if the only reason is that you filed on paper, are unfamiliar with software, have few records, or face extra time or cost.
If you are not exempt, HMRC's guidance says you can change your software at any time and use different compatible software for different income sources. An agent using compatible software can meet MTD requirements for you. If you change software, you must still store digital records for at least 5 years from the submission deadline for each tax year.
What if HMRC Refuses Your Exemption?
HMRC's letter explains why and how to appeal.
You can appeal within 30 days of the date on the letter.
Appeals must be in writing with HMRC's subject title (for digital exclusion it ends "digitally excluded appeal"; for other exemptions, "exemption appeal"). Send it to the address on your letter, with any new information you want HMRC to consider.
If you need more time, call or write to Self Assessment general enquiries. Agents contact the Agent Dedicated Line.
HMRC advises reading its step-by-step MTD guidance to prepare in case the appeal fails, and to keep your Self Assessment records as normal. It does not set out any rule on whether MTD obligations pause during an appeal, so contact HMRC to confirm your position.
Exemption Versus Choosing Your Software
Exempt means HMRC accepts you do not need to use MTD. Required but choosing how means you must use MTD and choose compatible software or an agent who uses it. Refusing to use software is not an exemption ground.
MTD Exemption Examples
A Landlord With Genuine Digital Exclusion
A landlord's health condition prevents them from using a computer, tablet, or smartphone. HMRC lists this as an example, so they may qualify. HMRC decides case by case.
A Landlord Who Dislikes Software
If this is the only reason, HMRC says it will not accept the application.
A Landlord Who Uses an Accountant
If the accountant uses compatible software to keep records and submit them, they can meet the requirements, and the landlord may not need an exemption.
A Voluntary Participant
They can opt out through their HMRC online account. HMRC deletes updates for that year, and the old penalty regime does not return.
Someone Waiting for a Decision
If already signed up, keep using MTD while waiting, per HMRC. If not, HMRC's guidance says to prepare in case the application fails.
Landlords By Income (Official Thresholds)
A landlord with £24,000 qualifying income in 2026 to 2027 must use MTD from 6 April 2028. A landlord with over £50,000 in 2024 to 2025 has needed it since 6 April 2026. A landlord with £18,000 is automatically exempt.
If You Are Not Exempt, What Are Your Options?
You can use compatible software yourself or an agent can. RentalBux is designed for landlords and sole traders who need to manage property or business income and expenses and meet MTD for Income Tax requirements. It supports digital property records, income and expense tracking, transaction categorisation, MTD submissions, bank feeds, receipt digitisation, spreadsheet uploads, mobile access and multiple properties. RentalBux cannot apply for an exemption, decide whether you qualify, give tax advice or remove an MTD obligation. Only HMRC decides exemptions.
Conclusion
Whether you are exempt from MTD for Income Tax depends on HMRC's rules, not on preference. Start by checking your qualifying income and whether an automatic exemption applies. If neither does, consider whether digital exclusion fits your circumstances and apply before you are required to use MTD. If you are already signed up, HMRC says to keep using MTD while you wait, and in every case to keep your Self Assessment records as normal. Where HMRC's guidance gives no rule, contact HMRC directly. Voluntary users can leave through their HMRC online services account. If you are not exempt, you can choose compatible software or an agent, and RentalBux is one option for landlords and sole traders who want to keep digital property records and make MTD submissions.
