Making Tax Digital exemptions: who doesn't have to use MTD for Income Tax
Most sole traders and landlords above the threshold must use Making Tax Digital for Income Tax. But some people are exempt automatically, a lot of income does not count towards the threshold, and HMRC can exempt you if you cannot go digital. Here is the full list from GOV.UK, in plain English.
Exempt automatically: you do not need to apply
| Who | Exempt |
|---|---|
| Qualifying income of £20,000 or less | Not covered by the announced thresholds (£50,000 from April 2026, £30,000 from April 2027, £20,000 from April 2028) |
| Partnerships | No date yet: the government will set out a timeline later |
| No National Insurance number before the tax year starts | For that tax year (you cannot sign up without one) |
| Trusts filing an SA900 and non-resident companies filing an SA700 | Exempt; trustees keep filing Self Assessment as normal |
| Personal representatives of someone who has died | Exempt, but outstanding returns must still be completed |
| Lloyd’s underwriting (SA103L) or declared unable to deal with HMRC, with a power of attorney or a deputy, in your 2024 to 2025 return | Exempt |
| Averaging relief (SA103), qualifying care relief such as foster or kinship care, or the SA107 (trusts) or SA109 (residence) pages in your 2024 to 2025 return | Until April 2027, then the £30,000 rule applies |
| Minister of religion (SA102M), Married Couple’s Allowance or Blind Person’s Allowance in your 2024 to 2025 return | Beyond April 2027: timeline to be set out later |
The “2024 to 2025 return” rows are based on what you included in that Self Assessment return. If you did not include those pages then but expect to in 2025 to 2026 or 2026 to 2027, GOV.UK says you must apply instead.
Qualifying income: what counts and what doesn't
The threshold is about turnover, not profit: your self-employment and property income added together, before expenses, taken from an earlier tax return: your 2024 to 2025 return for April 2026, your 2025 to 2026 return for April 2027 and your 2026 to 2027 return for April 2028.
Counts
- Self-employment income, before expenses (turnover)
- Rental income from UK property, before expenses
- Foreign property income, if you were UK resident for tax in 2024 to 2025
- Your share of income from property you own jointly
- A business or property you stopped, if you still have another one running
Does not count
- A salary or wages taxed through PAYE
- The State Pension and private pensions
- Dividends, including from your own company
- Your share of partnership profits
- Qualifying care relief, one-off UK land sales, and income from REITs or PAIFs
Three examples
| Situation | Qualifying income | Result |
|---|---|---|
| £27,000 self-employment turnover and £25,000 rent (HMRC's example) | £52,000 | MTD from April 2026 |
| A flat let for £50,000 a year, owned half and half with a sibling (HMRC's example) | £25,000 each | Based on that figure in the 2026 to 2027 return: MTD from April 2028 |
| Retired: £18,000 of pensions and £24,000 of rent (our illustration) | £24,000 — the pensions do not count | Based on that figure in the 2026 to 2027 return: MTD from April 2028 |
Work out your own date in 2 minutes
Enter your turnover and rent: you get your start date, or confirmation that you are out of scope, plus every deadline for your calendar.
Pensions and Making Tax Digital
MTD does not change how your pension is taxed, and pension income does not count towards the threshold. What matters is the turnover of any self-employment and the rent you receive. A retired landlord with high rents can still need MTD; a retired person with a large pension and no business or rental income does not.
If your 2024 to 2025 return included Married Couple's Allowance or Blind Person's Allowance, you are exempt beyond April 2027, until the government sets out a timeline.
Partnerships
Partnerships do not need to use MTD for Income Tax yet, and your share of partnership profits does not count towards your qualifying income. If you also run your own business or let property in your own name, that income does count. Partners who claimed, or expect to claim, averaging relief on the SA104 must apply for an exemption if they would otherwise need to use MTD.
Digitally excluded: when HMRC can exempt you
HMRC can exempt you if you cannot use software to keep digital records or send them to HMRC, because of:
- your age, health or a disability that stops you using a computer, tablet or smartphone for this;
- where you live or work: you cannot get internet access there or at a suitable alternative place;
- your religious beliefs: you are a practising member of a religious society whose beliefs are incompatible with digital communications or records, and you do not use a computer, tablet or smartphone for business or personal use;
- another reason: HMRC looks at every application case by case.
These are not accepted on their own: you sent a paper tax return before, you are not familiar with accounting software, you have only a few records, signing up takes extra time or costs money.
How to apply for an exemption
- Call or write to HMRC's Self Assessment general enquiries (agents use the Agent Dedicated Line). In a letter, use the title “Making Tax Digital for Income Tax — digitally excluded application” or “— exemption application”.
- Give your National Insurance number, name and address, and why you should be exempt. For digital exclusion, add how you file today, why you are digitally excluded, any agent you use and any additional needs.
- Wait for HMRC's letter. HMRC aims to reply within 28 calendar days. Meanwhile, keep your records as you do for Self Assessment; if you have already signed up, keep using MTD.
- If HMRC says no, you can appeal in writing within 30 days of the date on the letter.
An accepted exemption can be temporary — until at least April 2027 — or permanent: the letter tells you which. If HMRC already accepted that you are digitally excluded from MTD for VAT and nothing has changed, contact Self Assessment general enquiries: you will also be exempt for Income Tax. Being exempt does not remove Self Assessment: you still send a tax return.
Questions
Am I exempt from MTD because I am over 65?
Not because of age alone. Age counts only if it means you cannot use a computer, tablet or smartphone to keep digital records or send them to HMRC. Then you can apply for a digital exclusion exemption.
Does my pension count towards the MTD threshold?
No. The State Pension and private pensions do not count. Only self-employment and property income, before expenses, count.
Do partnerships have to use MTD for Income Tax?
Not yet. The government will set out a timeline later. Your own sole trader or rental income outside the partnership still counts.
How long does HMRC take to decide on an exemption?
HMRC aims to reply within 28 calendar days, longer if it needs more information.
Do I still file a tax return if I am exempt?
Yes. You keep sending a Self Assessment tax return as normal.
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Sources (checked 9 October 2026): GOV.UK — find out if you can get an exemption (updated 28 May 2026), apply for an exemption (updated 17 August 2026), work out your qualifying income (updated 11 September 2026), find out if and when you need to use MTD (updated 26 March 2026). This is guidance, not tax advice.