Exemptions from Making Tax Digital for Income Tax
From April 2026, the self-employed and landlords must use MTD for IT, but exemptions may apply in limited cases.
If you are self-employed or a landlord with income over £50,000, you will need to prepare for digital record keeping, quarterly updates and a new penalty system. While most affected taxpayers will be required to comply, there are limited exemptions available.
You can apply for an exemption if you believe you are digitally excluded. HMRC will consider applications on a case-by-case basis once the process opens.
You may be eligible if:
- it is not practical for you to use software to keep or submit digital records – this could be due to age, disability, location, or another reason; or
- you are a practising member of a religious society or order whose beliefs are incompatible with electronic communication and digital record keeping.
In addition, if HMRC has already confirmed that you are exempt from Making Tax Digital for VAT, you will need to contact them again once the MTD for IT application process opens. HMRC will then review your exemption. If your circumstances remain the same then HMRC will confirm you are also exempt from MTD for IT. If not, you will need to reapply.
Some taxpayers are automatically exempt from MTD for IT and do not need to apply.
These include:
- trustees, including charitable trustees and trustees of non-registered pension schemes
- individuals without a National Insurance number, applicable only if one is not held by 31 January before the start of the tax year
- personal representatives of someone who has died
- Lloyd’s member, in relation to your underwriting business
- non-resident companies
If you are automatically exempt, you do not need to apply for an exemption. If you do not use MTD for IT, you must continue to report your income and gains by submitting a Self-Assessment tax return if required.
Understanding MTD for Income Tax Exemptions
While Making Tax Digital for Income Tax will apply to most self-employed individuals and landlords from April 2026, understanding whether an exemption applies is crucial to remaining compliant. At CIGMA Accounting, we support retailers, construction companies,
healthcare professionals, and recruitment companies in assessing MTD obligations, determining exemption eligibility, and ensuring the correct reporting approach is followed where digital record-keeping is not required.
Local Advice and Ongoing Support
Our experienced accountants work with clients through our London offices in Farringdon and Hammersmith, as well as nearby areas including Moorgate, Finsbury Circus, King Street (W6 High Street), and Brook Green, providing clear, practical advice on MTD exemptions, applications, and ongoing Self-Assessment obligations.
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