HMRC open MTD exemption applications for the 2027/28 tax year

HMRC have updated their guidance on applying for an exemption from Making Tax Digital for Income Tax (MTD) to confirm that applications are now being accepted for the 2027/28 tax year.

This is particularly relevant for those sole traders and landlords who were not required to comply with MTD from April 2026 because their qualifying income was below the £50,000 threshold for income-based exemption, but who have qualifying income above the £30,000 threshold that applies for the 2027/28 tax year. 

Unless they are exempt from doing so, taxpayers with gross income from self-employment and property income above £30,000 in the 2025/26 tax year will need to maintain digital accounting records and submit quarterly updates to HMRC from April 2027.

Who needs to apply for an exemption? 

Our MTD exemptions guide explains more about the MTD exemptions categories and application process. It will be not be necessary to apply for an exemption if one applies automatically. 

Exemption should apply automatically for certain taxpayers if the relevant circumstances are disclosed to HMRC in their 2025/26 self-assessment tax return, provided it is submitted by 31 January 2027. This includes taxpayers with no National Insurance number, Lloyds underwriters, Ministers of religion and recipients or transferors of Married Couples Allowance and Blind Persons Allowance.

Automatic exemption will also apply for taxpayers under a deputyship order (or devolved equivalents in Scotland and Northern Ireland) or those under an enduring/lasting Power of Attorney where the taxpayer is no longer 'capable of providing financial information to HMRC'. 

Whilst some exemptions apply automatically, the taxpayer (or their agent) will need to apply for an exemption if the relevant circumstances are not disclosed on their 2025/26 tax return - for instance where they arose after 5 April 2026.

Taxpayers carrying out certain activities may also be exempt from MTD, normally subject to 'notice' being given to HMRC. 'Notice' may simply mean reporting the relevant activity on a tax return which is submitted to HMRC, but formal exemption applications may be needed in some instances. See our MTD exemptions guide for further details. 

Digitally excluded taxpayers

Taxpayers who are digitally excluded can apply to HMRC for an enduring MTD exemption if they have circumstances which make it not reasonably practicable to comply with MTD. Taxpayers with qualifying income above £30,000 in 2025/26 can now apply for exemption from MTD effective from April 2027 on grounds of digital exclusion, or their agent can do so on their behalf.

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

Taxpayers granted exemption from MTD for VAT on grounds of digital exclusion will need to contact HMRC to confirm whether those same grounds still apply before they can be exempted from MTD for Income Tax. 

Taxpayers with temporary exemptions for 2026/27 

Taxpayers qualifying for a temporary exemption in the 2026/27 tax year will not be able to rely on that exemption in 2027/28. This includes taxpayers needing to file non-residence (SA109) supplementary pages with their tax return, taxpayers claiming averaging adjustments (such as farmers, musicians, writers and other creative artists), taxpayers with income from trusts or estates and taxpayers claiming qualifying care relief. 

Sole traders and landlords with a temporary exemption will need to comply with MTD from April 2027 unless they qualify for exemption for some other reason. See our MTD exemptions guide for further details. 

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. 

Written applications should use one of the following subject lines to help HMRC process incoming post:

• ‘Making Tax Digital for Income Tax — digitally excluded application’ if applying for exemption on grounds of digital exclusion 
• ‘Making Tax Digital for Income Tax — exemption application’ if applying for any other exemption

More resources and support

As well as HMRC's MTD guidance, the ATT has a range of MTD resources for members and the public.