In August, HMRC officially opened the Making Tax Digital (MTD) exemption application window for taxpayers in the £30,000 income bracket. This follows the initial launch of MTD for individuals earning over £50,000. Self-employed individuals and landlords with a qualifying income over £30,000 will be legally mandated to join MTD from 6 April 2027.

Who can apply for an exemption now?

Taxpayers (sole traders and landlords) whose qualifying income for the 2025/26 tax year is over £30,000, and who believe they meet the criteria for an exemption.

While MTD is mandatory for qualifying individuals, Part 7 of The Income Tax (Digital Obligations) Regulations 2026 highlights various circumstances where exemptions can be granted to taxpayers who can demonstrate that:

• digital requirements are not practical due to age, disability or other personal circumstances
• the individual is seriously ill or facing circumstances that make digital reporting impossible
• the taxpayer has religious beliefs that prevent the use of digital tools
• other exceptional circumstances make compliance unreasonable, such as living in a remote area without internet access.

Being digitally excluded means that it is not reasonable for a taxpayer to use compatible software to maintain digital records, submit quarterly updates or complete their tax return.

The following taxpayers were exempt from MTD for ITSA compliance for 2026/27 but must apply for exemption for 2027 to 2028 if they:

• have qualified income above £30,000 in the 2025 to 2026 tax year; and
• claimed averaging relief (as a farmer, market gardener or someone who personally creates literary or artistic works) using the SA103 supplementary page as an individual; or
• claimed qualifying care relief (such as foster carer or kinship carer); or
• included the SA107 supplementary page to report income from trusts or estates; or
• included the SA109 supplementary page.

Automatic exemptions that last beyond April 2027 

The following taxpayers are automatically exempt if their 2024 to 2025 tax return included any of the following claims or pages:

• the SA102M supplementary page because they are a minister of religion of any faith, religion or denomination
• the SA103L supplementary page because they are a Lloyd’s member with self-employment or property income
• declared that they received or transferred Married Couple’s Allowance (for those born before 6 April 1935)
• declared that they received or transferred Blind Person’s Allowance
• that they are not physically or mentally capable of providing information to HMRC and have either:
  - given power of attorney to someone in the UK to act on their behalf and it is currently in place
  - a legally appointed deputy, controller or guardian in place.

If one of these exemptions applies, they do not need to contact HMRC or apply for an exemption.

Find out about the process of applying for exemptions.

Exemptions are subject to HMRC approval

Taxpayers must legally continue to prepare for or use MTD rules while their application is being reviewed. HMRC typically takes several weeks to process these requests. Taxpayers falling into the lower £20,000 threshold (mandated from April 2028) cannot apply for their exemptions until summer 2027 onwards.

It is important to note that claiming an exemption is not automatic. Taxpayers must apply to HMRC and provide evidence supporting their case. HMRC evaluates each application individually to ensure that exemptions are granted only when genuinely warranted.

HMRC does not provide free MTD software, meaning taxpayers generally need to pay a monthly software fee or use suitable bridging software.

Summary of MTD for ITSA phased rollout

You can use the HMRC Interactive Exemption Tool to verify if you or your clients qualify for exemption. Alternatively, you can review technical policy updates directly on the ACCA Global MTD Hub.