Am I exempt from Making Tax Digital?

Exemptions from MTD for Income Tax exist, but they're narrow. Three routes: automatic permanent exemptions, automatic temporary exemptions, and an exemption you have to actively apply for, on the grounds of digital exclusion.

Automatic permanent exemptions

No application needed. These apply based on details HMRC already holds. You're exempt if you:

• Have a qualifying income of £20,000 or less
• Don't have a National Insurance number
• Are submitting a tax return as a trustee
• Are submitting an Income Tax return on behalf of a non-resident company

These apply permanently unless your circumstances change. If your income later crosses £20,000, the exemption stops applying at the relevant threshold, in the ordinary way.

Automatic temporary exemptions

Some exemptions are automatic but temporary, lasting until at least April 2027. Partnerships also don't currently need to use MTD for Income Tax at all. HMRC hasn't set a timeline for bringing them in yet. See our partnership guide.

Applying for a digitally excluded exemption

If none of the automatic exemptions apply to you, you can apply on the basis that it's not reasonable for you to use compatible software to keep digital records or submit them. HMRC lists specific accepted reasons.

• Your age, a health condition, or a disability stops you using a computer, tablet or smartphone for this
• You're a practising member of a religious society or order whose beliefs are incompatible with digital communications or record-keeping, and you don't use digital devices for business or personal use
• You can't get internet access at your home or business because of your location, and can't reasonably get access elsewhere

What the application involves

Applications are decided case by case. You'll need your National Insurance details, an explanation of how you currently file, whether you have an agent, and details of any additional needs so HMRC can offer the right support. If you're applying on someone else's behalf as an authorised agent, friend or family member, the exemption is still assessed on the individual's own circumstances, not yours.

Further reading, direct from the source