Exemptions that apply automatically
Some circumstances exempt you without an application, and they last permanently unless your circumstances change.
- Your qualifying income is £20,000 or less
- You do not have a National Insurance number before the start of the tax year
- You are a partnership, as partnerships do not currently need to use the service
- You are a non-resident company submitting an SA700, or a trust submitting an SA900
- You act as a personal representative of someone who has died
- Your 2024-25 return used the SA103L page as a Lloyd's member for underwriting business
- Your 2024-25 return declared you are not physically or mentally capable of giving information to HMRC, with a power of attorney, deputy, controller or guardian in place in the UK
Several of these apply to the entity or the submission rather than to you personally. If you have your own self-employment or property income, you may still need to use the service yourself.
Exemptions that run out in April 2027
If your 2024-25 return included the SA107 page for trusts or estates income, the SA109 page, qualifying care relief, or averaging relief claimed as an individual with the SA103 supplementary page, you do not need to use MTD for Income Tax for 2026-27. You will need to use it from 2027-28 if your qualifying income was above £30,000 in 2025-26.
A second group is exempt beyond April 2027 - if your 2024-25 return included the SA102M page, a Married Couple's Allowance declaration or a Blind Person's Allowance declaration, or the SA103L page as a Lloyd's member who also has self-employment or property income. HMRC has said that timeline will be set out at a later date.
Exemptions you have to apply for
Three situations need an application to HMRC: being digitally excluded, expecting to include one of the April 2027 items in your 2025-26 or 2026-27 return when you did not include it in 2024-25, or expecting to include a Married Couple's Allowance, Blind Person's Allowance or SA102M entry in those returns.
HMRC's own wording on the applications is that you should not apply for an exemption if you do not have a good reason to think you will include any of that information in your 2025-26 or 2026-27 tax return.
What digitally excluded means
Being digitally excluded means it is not reasonable for you to use compatible software to keep digital records, to send quarterly updates, or to submit your tax return. HMRC's examples are age, a health condition or a disability that prevents you using a computer, tablet or smartphone; a religious society or order whose beliefs are incompatible with digital communication or digital records, where you do not use a computer, tablet or smartphone at all; and no internet access at home or at your business because of where you are, with no access at a suitable alternative location.
The MTD for VAT exemption is worded differently, around whether it is not reasonable or practical for you to use computers, software or the internet. The Income Tax pages use digitally excluded, exemptions you need to apply for, and good reason - those are the tests to answer against.
What to do if you think you are digitally excluded
Apply before you, or the person you are applying for, needs to use MTD for Income Tax. You can apply now for a 6 April 2026 or 6 April 2027 start, and you should apply from summer 2027 onwards for a 6 April 2028 start.
To apply for yourself or on behalf of someone else, call or write to HMRC using the contact details in Self Assessment: general enquiries, with a subject line of Making Tax Digital for Income Tax followed by either digitally excluded application or exemption application. HMRC aims to respond within 28 calendar days.
If your application is refused, the decision letter explains why and how to appeal, and you can appeal up to 30 days after the date on the letter. If you are already signed up and your circumstances change, apply for an exemption and keep using the service while you wait.
Two things are worth checking first. If HMRC has already confirmed you are exempt from filing VAT returns through MTD-compatible software because you are digitally excluded, contact Self Assessment: general enquiries with your National Insurance number, VAT number and the reason, and HMRC will confirm the same exemption applies here. If your agent uses compatible software to keep your records and submit them, you may not need to apply at all.
An exemption running until April 2027 means you do not need to sign up and use the service until the 2027-28 tax year at the earliest. While you are exempt during 2026-27 you remain on the current Self Assessment late payment and late filing penalties.