Making Tax Digital for Income Tax - don't delay with submitting exemption applications
As April 2026 fast approaches for the first group of taxpayers being legally required to comply with Making Tax Digital for Income Tax (MTD), it is important that those taxpayers who believe they will be exempt from MTD check if they (or their agent) need to carry out action ahead of the deadline for the first quarterly updates of 7 August 2026.
Our article on the MTD exemption rules explains in more detail about how some MTD exemptions will apply automatically but others need to be applied for.
Taxpayers who are 'digitally excluded' (i.e. have circumstances which make it not reasonably practicable to comply with MTD), need to apply for an exemption. HMRC aim to respond to digital exclusion exemption applications within 28 days, however this is undoubtedly going to be more challenging as more applications are received. Other taxpayers may also, depending on their situation, need to advise HMRC that they should be automatically or temporarily excluded.
The best advice is to submit exemption applications as soon as possible, including as much information as possible to enable HMRC to make an informed decision. If an exemption is refused, it is possible to appeal within 30 days of the decision (or by 30 April 2026, for decisions made before 1 April 2026).
To help ensure that applications are directed to the correct team, HMRC recommend that letters are headed “Making Tax Digital for Income Tax – digitally excluded application” or with the name of any other MTD exemption being claimed. This ensures HMRC’s letter scanning software correctly identifies it is an exemption application.
We are receiving mixed feedback about the turnaround of exemption applications. If you have submitted an application before the end of January and have not yet received a response, you may wish to contact HMRC to check on the status. There is an MTD option on the Agent Dedicated Line which should direct you to the correct team.
Members are encouraged to share any feedback on the MTD exemption process by emailing [email protected] as we have regular dialogue with HMRC's MTD team.
Upcoming ATT MTD events
We continue to run MTD peer-discussion groups, where attendees can share and discuss their practical concerns around MTD and support each other in an open forum.
We are also running a further MTD – your technical questions answered webinar on 7 May 2026 to help explain areas of uncertainty. Questions can be submitted in advance to [email protected] or asked on the day. We will do our best to include as many as we can during the webinar.
Both our MTD peer-discussion group and our MTD webinar are free to attend and are open to both members and non-members.