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Making Tax Digital: exemption cases, when and how to apply

3 February, 2026

As the April 2026 launch date for the first wave of taxpayers due to join Making Tax Digital for Income Tax (MTD) approaches, the list of taxpayers eligible for exemption or deferral has grown.

Potential exemptions from MTD fall into different categories: some apply automatically, others require either the taxpayer or their authorised agent to submit an application to HMRC. The duration of the possible exemptions also varies.

Now that the application process for MTD exemptions is open, below is a breakdown of the potential types.

Contents

 

Exemptions for unlimited periods

Some exemptions apply for an unlimited period, unless or until the relevant circumstances change.

Automatic exemptions – unlimited period

The following are automatically exempt from MTD for an unlimited period, unless or until their relevant circumstances change. Taxpayers in these circumstances do not need to inform HMRC that MTD does not apply to them.

 

  1. Companies – there are no plans to extend MTD to companies.
  2. Partnerships and Limited Liability Partnerships (LLPs) – MTD is intended to be expanded to partnerships and LLPs in the future, but no timescale has been set.  However, please note that individual partners or LLP members may still be in scope of MTD if they have qualifying income (e.g. they are also a sole trader or landlord in their own right).
  3. Individuals who do not have a National Insurance Number – assessed at 31 January before the date they would otherwise have to join MTD.
  4. Individuals with no qualifying income, or with qualifying income below the relevant MTD income threshold.
  5. Individuals claiming qualifying care relief (including foster carers and kinship carers) who have no other source of qualifying income.
  6. Lloyds underwriters who have no other source of qualifying income.
  7. Trustees, executors and personal representatives – in that capacity only. If they have qualifying income in a personal capacity which is more than the MTD threshold, MTD will apply to them personally.
  8. Taxpayers who lack physical or mental capacity and have given enduring power of attorney or lasting power of attorney to someone to act on their behalf, and taxpayers for whom the Court of Protection has appointed someone to act under a deputyship order.

 

Unlimited period exemptions subject to application

  1. Taxpayers who are digitally excluded can apply to HMRC for exemption from MTD for an unlimited period if they have circumstances which make it not reasonably practicable to comply with MTD.

Once approved by HMRC, digital exclusion exemptions apply until further notice, but the taxpayer has an obligation to inform HMRC if the reason for their application being approved ceases to apply.

Taxpayers who were granted exemption from MTD for VAT on grounds of digital exclusion will need to contact HMRC to confirm whether those same grounds still apply in order to be exempted from MTD for income tax.

 

Fixed-term exemptions

Some exemptions apply for a fixed term only - either for the current parliamentary term, or until April 2027. In some cases these are automatic, in others an application to HMRC is needed.

Automatic* exemptions for the term of the current parliament

The following groups of taxpayers will not have to join MTD at least during the course of the current parliament (which is expected to run until Summer 2029) even if they have qualifying income above the relevant MTD income threshold:

 

  1.  Ministers of religion who file SA102M supplementary pages with their tax return.
  2. Recipients and transferors of the Married Couple’s Allowance or the Blind Person’s Allowance.
  3. Lloyds underwriters in receipt of other qualifying income.

If the relevant circumstances qualifying for exemption were declared on a 2024/25 tax return, these taxpayers do not need to inform HMRC that MTD does not apply to them.

*If the relevant circumstances qualifying for exemption were not reported on a 2024/25 tax return, but are reasonably expected to apply in 2026/27, these taxpayers will need to apply for exemption, using the application process explained below.

 

Automatic* exemptions until April 2027

Taxpayers with qualifying income over £50,000 would normally have to join MTD from April 2026. However, the following groups will not have to join MTD until at least April 2027:

 

  1. Taxpayers in receipt of income from trusts or estates.
  2. Taxpayers claiming averaging adjustments (mainly farmers, musicians, writers and other creative artists).
  3. Taxpayers claiming qualifying care relief – eg foster carers who would otherwise have to join MTD due to another source of qualifying income.
  4. Taxpayers who filed non-residence (SA109) supplementary pages with their 2024/25 tax return, and reasonably expect to need to do so again in 2026/27.

If the relevant circumstances qualifying for exemption were declared on a 2024/25 tax return, these taxpayers do not need to inform HMRC that MTD does not apply to them in 2026/27.

*If the relevant circumstances qualifying for exemption were not reported on a 2024/25 tax return, but are reasonably expected to apply in 2026/27, these taxpayers will need to apply for temporary exemption until April 2027, using the application process explained below.

Where available, the temporary exemption from MTD until April 2027 excuses the taxpayer from MTD for the 2026/27 tax year. But it does not automatically mean they will need to join MTD in 2027/28. Their MTD obligations for 2027/28 will depend on their qualifying income in 2025/26 – if it is more than £30,000 they will need to sign up to MTD from April 2027.

 

Exemptions until April 2027 subject to application

  1. Taxpayers with qualifying income over £50,000 who would otherwise be expected to join MTD from April 2026 can apply for a temporary exemption from MTD until at least April 2027 if they have reason to believe they will need to file SA109 non-residence supplementary pages with their tax return in 2026/27.

This temporary exemption applies automatically where SA109 pages were submitted with the 2024/25 tax return and are expected to be required again in 2026/27, but has to be applied for where the 2024/25 tax return did not include SA109 pages.

Eligible taxpayers will need to apply for temporary exemption until April 2027, using the application process explained below.

 

  1. Non-resident entertainers and sportspeople with qualifying income over £50,000 who would otherwise be expected to join MTD from April 2026 can also apply for a temporary exemption from MTD until at least April 2027. This exemption requires an application to HMRC regardless of whether or not the qualifying income was reported on a 2024/25 tax return.

Where available, the temporary exemption from MTD until April 2027 excuses the taxpayer from MTD for the 2026/27 tax year. But it does not automatically mean they will need to join MTD in 2027/28. Their MTD obligations for 2027/28 will depend on their qualifying income in 2025/26 – if it is more than £30,000 they will need to sign up to MTD from April 2027.

 

Application process for MTD exemptions

HMRC have published details of how to apply for MTD exemption. Applications can be made by post or by phone, either by the taxpayer or their appointed agent.

Taxpayers otherwise expected to join MTD from April 2026 should apply to HMRC for exemption now, if they believe they fit one of the categories above. Those expecting to join MTD in either April 2027 or April 2028 are advised to apply for any applicable exemptions during the preceding summer.

HMRC aim to respond to MTD exemption applications within 28 days of receipt, so the need to apply is urgent where the taxpayer would otherwise have to sign up to MTD from April 2026.

 

The information presented on this page represents the ATT’s understanding based on the information available at the date of publication shown. You may wish to check against available legislation and any official guidance on GOV.UK that that position has not changed.