MTD for IT taxpayer exemption

tiemadmin • 28 August 2025

From April 2026, the self-employed and landlords must use MTD for IT, but exemptions may apply in limited cases.

If you are self-employed or a landlord with income over £50,000, you will need to prepare for digital record keeping, quarterly updates and a new penalty system. While most affected taxpayers will be required to comply, there are limited exemptions available.

You can apply for an exemption if you believe you are digitally excluded. HMRC will consider applications on a case-by-case basis once the process opens.

You may be eligible if:

  • it is not practical for you to use software to keep or submit digital records – this could be due to age, disability, location, or another reason; or
  • you are a practising member of a religious society or order whose beliefs are incompatible with electronic communication and digital record keeping.

In addition, if HMRC has already confirmed that you are exempt from Making Tax Digital for VAT, you will need to contact them again once the MTD for IT application process opens. HMRC will then review your exemption. If your circumstances remain the same then HMRC will confirm you are also exempt from MTD for IT. If not, you will need to reapply.

Some taxpayers are automatically exempt from MTD for IT and do not need to apply.

These include:

  • trustees, including charitable trustees and trustees of non-registered pension schemes
  • individuals without a National Insurance number, applicable only if one is not held by 31 January before the start of the tax year
  • personal representatives of someone who has died
  • Lloyd’s member, in relation to your underwriting business 
  • non-resident companies

If you are automatically exempt, you do not need to apply for an exemption. If you do not use MTD for IT, you must continue to report your income and gains by submitting a self-assessment tax return if required.

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