Who Is Exempt from Making Tax Digital for Income Tax?

Not everyone has to follow Making Tax Digital for Income Tax. Some people are outside it because of their income, some because using digital tools genuinely isn't practical for them, and some because HMRC has deferred their group. Here's who's out — and how to make it official where you need to.

1. Below the income threshold

The simplest exemption is income. If your gross qualifying income (combined self-employment and property turnover) is below the current threshold, you're not mandated:

From	Mandated if income over
6 April 2026	£50,000
6 April 2027	£30,000
6 April 2028	£20,000

Two caveats:

• The threshold drops over time, so being out now doesn't mean out forever — most full-time sole traders and landlords will be in scope within a couple of years.
• You can join voluntarily before you're mandated, which some people do to smooth the transition.

2. Digitally excluded

If it isn't reasonable or practical for you to keep digital records and use compatible software, you may qualify as digitally excluded. Grounds include:

• Age or disability that makes using digital tools impractical.
• Location — for example, no reliable internet access where you live.
• Religious beliefs that are incompatible with using computers.

This exemption is not automatic. You must apply to HMRC and be approved. If approved, you can continue reporting the old way. Anyone who was previously exempt from MTD for VAT on similar grounds generally still needs to confirm their position for Income Tax.

3. Deferred and excluded groups

Some categories are outside the early phases of MTD, either deferred or carved out. These have included:

• Partnerships — deferred; HMRC will confirm timing separately.
• Non-resident and SA109 filers — those with more complex residence, foreign-income or treaty situations are largely deferred in the first waves.
• Certain trustees, personal representatives and specific SA situations — where the MTD process doesn't fit, HMRC has exclusions.
• People without a National Insurance number in some circumstances, and other narrow technical cases.

The exact list has evolved as HMRC finalised the rules, so if you think you fall into a special category, check the current position rather than relying on an older summary.

How to apply for an exemption

If you believe you're digitally excluded:

1. Contact HMRC to request an exemption on digital-exclusion grounds.
2. Explain your circumstances (age, disability, connectivity, or religious grounds).
3. Wait for approval before assuming you can file the old way — don't stop preparing for MTD until HMRC confirms.

Being below the threshold needs no application — but keep an eye on your income, because crossing the line puts you in from the next relevant year.

Don't guess — confirm your status

The costliest mistake is assuming you're exempt and then discovering, after a missed deadline, that you weren't. If there's any doubt:

• Check your gross qualifying income against the current threshold.
• Apply and get written confirmation for any digital-exclusion exemption.
• Review your HMRC obligations — if HMRC expects submissions from you, they'll show there.

If you are in scope, ThisQuarter gives sole traders and accountants a straightforward, HMRC-recognised way to keep digital records and file — with particular strength for construction/CIS clients. See how it works.

The bottom line

Exemptions fall into three buckets: under the threshold, digitally excluded (apply and get approved), and deferred groups. Everyone else is in — and the threshold only comes down from here, so it's worth confirming your status early rather than assuming.