Who's exempt from MTD for Income Tax?
Most sole traders and landlords over the income threshold will have to follow Making Tax Digital for Income Tax, but a genuine minority are exempt. Here's who doesn't have to comply, how to apply if you think that's you, and the difference between being exempt and simply being under the threshold — a distinction people get wrong all the time.
Exempt vs. under the threshold
These are not the same thing. If your qualifying income is below the lowest announced threshold (£20,000) you're not mandated yet — but the threshold has only ever moved downward, so you could be brought in later. Being exempt means you don't have to comply even when your income is over the threshold. The rest of this page is about real exemptions, not the threshold — for that, see the deadlines & who's affected page.
Automatic exemptions
Some people don't have to apply at all. HMRC's list includes certain trustees, personal representatives of someone who has died, and people in specific circumstances without a National Insurance number. These are narrow categories — if you think one fits you, confirm it against the official list rather than assuming.
The digitally-excluded exemption (you apply for this)
The exemption most people mean is for being digitally excluded: where it isn't reasonable or practical for you to keep digital records and file through software. Valid grounds can include age, a disability, the remoteness of where you live (no reliable internet), or religious beliefs. The key point is that it's not automatic— you have to apply to HMRC, and HMRC decides. Simply preferring paper or disliking software doesn't qualify.
What to do if you're not sure
Exemptions are narrower than most people hope. If there's genuine doubt, the safe assumption is that you'll be mandated (April 2026 (£50k+), then April 2027 (£30k+), then April 2028 (£20k+)) — and getting ready is cheap. A bridging tool can file straight from a spreadsheet, and several options are genuinely free. If you think you have real grounds to be excluded, speak to an accountant before relying on it.
Frequently asked questions
- Am I exempt if my income is under the threshold?
- That's not an exemption — it just means you're not mandated yet. The threshold steps down over time, so an income below the current figure can be brought in later. Being exempt is different: it means you don't have to comply even when your income is over the threshold.
- How do I apply to be digitally excluded?
- If it isn't reasonable or practical for you to use compatible software — for example because of age, disability, location or religious grounds — you can apply to HMRC for an exemption. It isn't automatic; you have to ask, and HMRC decides. The route to apply is on GOV.UK.
- Who's automatically exempt?
- Certain groups don't need to apply, including some trustees and personal representatives, and people without a National Insurance number in particular circumstances. The definitive list is HMRC's — check GOV.UK or ask an accountant if you think you might qualify.
- Should I rely on being exempt?
- Only if you're certain. Exemptions are narrower than people expect, and 'I don't like software' isn't one of them. If there's any doubt, it's safer to assume you'll be mandated and have a low-cost tool ready than to be caught out by a deadline.
Keep reading
Exemption rules are HMRC's and the route to apply is on GOV.UK. This is general information, not tax advice — confirm your own position with HMRC or a qualified accountant.