Who Is Exempt from Making Tax Digital for Income Tax?

With Making Tax Digital for Income Tax (MTD for IT) on the horizon, much of the focus has been on who will need to comply. But just as important is understanding who is exempt — whether permanently or temporarily.

Here’s a practical summary of the exemptions currently available.

When Does MTD for IT Apply?

MTD for IT will apply from April 2026 to individuals whose qualifying income from self-employment or property exceeds £50,000. HMRC will use your 2024/25 tax return to determine whether you are mandated.

If you are newly self-employed or newly receiving property income, mandation will begin after your first Self Assessment tax return is submitted.

AUTOMATIC EXEMPTIONS

Some individuals are automatically exempt:

Permanent Automatic Exemptions

You are permanently exempt if you are filing in the capacity of:

• A person filing on behalf of a non-resident company
• A trustee (including charitable trusts and non-registered pension schemes)
• A personal representative or executor of someone who has died
  (Note: This exemption applies only in that role. If you have qualifying income personally, you may still be mandated.)
• A Lloyd’s member filing for underwriting business
• Someone who is not physically or mentally capable, where:
  • A lasting or enduring power of attorney has been granted, or
  • A court-appointed deputy acts on their behalf

No application to HMRC is required.

Exempt Until Circumstances Change

You are automatically exempt (unless your situation changes) if:

• Your qualifying income is £20,000 or less
• You do not have a National Insurance number

No application to HMRC is required

Temporary Exemptions (Until April 2027)

If your 2024/25 tax return included any of the following, you are exempt from MTD for IT until April 2027:

• An averaging relief claim (e.g. farmers or creative artists)
• A qualifying care relief claim (e.g. foster carers, kinship carers)
• Income from trusts or estates (SA107 page)
• The SA109 Foreign pages, and you expect to include them again in 2026/27

From the 2027/28 tax year, MTD for IT will apply if your qualifying income exceeds £30,000 in 2025/26.

No application to HMRC is required, however, if these pages were not included in your 2024/25 return but are expected in 2026/27, you should apply for an exemption.

SA109 (Foreign Pages) – Who Needs Them?

You’ll need to complete SA109 in 2026/27 if you are:

• Non-UK resident
• Dual resident
• Claiming overseas workday relief
• Expecting split-year treatment
• Expecting to elect for the temporary repatriation facility
• Expecting to claim for the foreign income and gains regime
• A former remittance basis user expecting to claim business investment relief

Exemptions That Last Beyond April 2027

You are automatically exempt (with future timelines to be confirmed by HMRC) if your 2024/25 return included:

• SA102M pages (employed Ministers of religion)
• Married Couple’s Allowance (for those born before 6 April 1935)
• Blind Person’s Allowance
• Lloyd’s members with self-employment or property income

Again, no application to HMRC is required.

Exemptions You Must Apply For

Some exemptions require an application.

Digital Exclusion

You may qualify as digitally excluded if it is not reasonable for you to use MTD-compatible software due to:

• Age, health condition or disability
• Religious beliefs preventing digital use
• No reliable internet access (with no suitable alternative)

HMRC will not accept applications simply because:

• You previously filed paper returns
• You are unfamiliar with accounting software
• You have very few records
• It costs time or money to comply

Each case is assessed individually.

If someone applies on your behalf, the exemption is still based on your personal circumstances.

Already Exempt from VAT MTD?

If HMRC previously granted you digital exclusion for MTD for VAT:

• You must contact HMRC to confirm whether it also applies to MTD for IT.
• If circumstances haven’t changed, the exemption may continue.
• If circumstances have changed, you must make a separate application.

If your VAT exemption is due to insolvency and you are already signed up to MTD for IT, you are not automatically exempt.

Non-UK Resident Entertainers and Sportspersons

Non-UK resident foreign entertainers and sportspersons must apply for exemption, even if income was included in the 2024/25 return.

Final Thoughts

MTD for IT is coming — but not everyone will be required to comply immediately, and some individuals may never need to.

The key points to remember:

• Some exemptions are automatic.
• Some last only until April 2027.
• Some require an application.
• HMRC will use your 2024/25 tax return to determine mandation from April 2026.

If you believe any of these exemptions may apply to you, it’s important to seek advice early to ensure the correct position is taken.

Click here to view the MTD for IT – Exemptions Guide

Full information can be found here

Get In Touch

For tailored guidance, contact your usual Whitings contact or your local Whitings office today.