Making Tax Digital exemptions application process opens

29 September, 2025

Ahead of the first group of taxpayers being legally required to comply with Making Tax Digital for Income Tax (MTD) in April 2026, HMRC have now opened the application process for taxpayers to claim an exemption from MTD and provided guidance on who can claim an exemption.

Who needs to apply for MTD exemption

You will not need to comply with MTD if your qualifying income is below the relevant threshold. This is £50,000 from April 2026, reducing to £30,000 in April 2027 and £20,000 in April 2028. 

While the exemption criteria for MTD for Income Tax largely mirror those applicable to MTD for VAT, HMRC have confirmed that taxpayers who have been granted an exemption from MTD for VAT will need to contact HMRC to confirm that the exemption in place for MTD for VAT will also apply to MTD for Income Tax.  There will be some cases when the MTD for VAT exemption cannot apply for Income Tax, such as where the business is subject to an insolvency procedure.

There are some further exemptions which apply automatically, details of which can be found on our MTD Frequently Asked Questions page.  Automatic exemptions include trustees and personal representatives, income received by foster carers, individuals without a National Insurance Number and non-resident companies.

If you are not automatically exempt, you can apply for exemption from MTD via the service above if any of the following apply:

  • It’s not reasonably practicable for you to use digital tools to keep your business records or submit quarterly returns due to age, disability, remoteness of location or any other reason (often referred to as ‘digital exclusion’).
  • Your business is run entirely by practising members of a religious society or order whose beliefs are incompatible with using electronic communications or keeping electronic records.

According to HMRC, digitally excluded means it’s not reasonable for a taxpayer to use compatible software to keep digital records or submit them to HMRC. Whilst HMRC have not provided examples of what they will (and won’t) accept as ‘not reasonable’, their guidance does give some high level reasons why an individual might be digitally excluded, for example:

  • Their age, a health condition or disability stops them from using a computer, tablet or smartphone.
  • They cannot get internet access at their home or business, and cannot get access at a suitable alternative location 

How to apply for MTD exemption

Taxpayers can apply themselves, or an authorised agent or friend / family member can apply on their behalf.  Applications must be made by either by calling or writing to Self Assessment: general enquiries. Letters should use the title ‘Making Tax Digital for Income Tax — digitally excluded application’.

Applications will need to include the taxpayer’s National Insurance Number, name and address. Information will also have to be provided regarding how they currently file their self-assessment return, whether or not they have an agent (and what that agent does), why they believe they are digitally excluded and any additional needs they may have.

Once received, HMRC will aim to consider the application within 28 days and will send a letter confirming whether or not it has been accepted. If the taxpayer disagrees with their decision, they will have 30 days to appeal.

Unless a taxpayer is automatically exempt on income or other grounds, they will be legally required to fulfil the MTD requirements to keep digital accounting records and submit quarterly updates to HMRC until such time as their exemption has been granted. We would therefore encourage applications to be submitted to HMRC as soon as possible.

Further resources and support

HMRC have launched a MTD Agent Outreach initiative, offering assistance ahead of the first group of taxpayers being required to comply with MTD from April 2026.  Agents can complete an online form via their Agent Services Account to express an interest for additional support.

As well as HMRC's resources, the ATT also has a range of MTD resources for members and the public, which are available via our MTD landing page.  You may wish to sign up for our MTD peer-discussion groups, where attendees can share and discuss their practical concerns around MTD and support each other in an open forum.