Some people never need to use Making Tax Digital for Income Tax, and others have had their start date pushed back. The automatic exemptions cover anyone with qualifying income of £20,000 or less, anyone without a National Insurance number, trustees, personal representatives and people with a power of attorney or deputy in place. Partnerships, and several groups identified from their 2024 to 2025 return, have been deferred to April 2027 or to a date not yet announced.

What does being exempt actually change?

An exemption only removes the digital obligations: keeping digital records, sending quarterly updates and filing the return through compatible software. HMRC’s guidance is explicit that an exempt person must still report income and gains on a Self Assessment return as normal.

The exemptions are in Part 7 of the Income Tax (Digital Obligations) Regulations 2026 (SI 2026/336). HMRC sorts them two ways:

  • automatic, given from information HMRC already holds, with no need to contact HMRC, or on application, where you must tell HMRC why you are exempt
  • permanent, lasting unless circumstances change, or temporary, lasting until April 2027 at the earliest

Many of the automatic exemptions are triggered by a specific supplementary page or claim on the 2024 to 2025 return. That is why the exact pages filed last year now affect who has to start.

Which exemptions apply automatically and permanently?

Low income. HMRC treats anyone with qualifying income of £20,000 or less as automatically exempt. In the regulations this is the income exemption in Chapter 2 of Part 7, tied to the qualifying amounts in regulation 27. How the figure is worked out is covered in what counts as qualifying income for MTD.

No National Insurance number. Under regulation 35, MTD does not apply for a tax year if the individual has no National Insurance number on 5 April at the end of the previous tax year. HMRC’s example: someone who receives a number on 30 April 2026 is exempt for 2026 to 2027 even if qualifying income for 2024 to 2025 was over £50,000.

Role based exemptions. HMRC lists:

  • non resident companies filing an SA700
  • trusts filing an SA900, including charitable trusts and trusts of non registered pension schemes
  • personal representatives of someone who has died

These cover returns made in that capacity only. A trustee or executor with their own rental or trading income still has to test their personal qualifying income.

Lack of capacity. Regulation 32 exempts a person who has given a lasting or enduring power of attorney (or the Scottish and Northern Irish equivalents) that is still in place, and a person for whom a deputy, guardian or controller has been appointed. A power only counts if the donor is no longer capable of providing financial information to HMRC. HMRC applies this automatically where the 2024 to 2025 return said so.

Which groups have had their start date deferred?

Partnerships. Partnership returns are not yet within MTD. HMRC says it will set out a timeline later. An individual partner’s profit share is not qualifying income, so it does not bring a partner in; see MTD for partnerships.

Deferred until April 2027. Chapter 6 of Part 7 (regulations 39 to 44) gives a temporary exemption for 2026 to 2027 only. HMRC applies it automatically if the 2024 to 2025 return:

  • claimed averaging relief as an individual on the SA103 pages, as a farmer, market gardener or creator of literary or artistic works (see averaging for farmers and creators)
  • claimed qualifying care relief, for example as a foster or kinship carer
  • included the SA107 trusts and estates pages
  • included the SA109 residence and remittance basis pages

These people must use MTD from 2027 to 2028 if their qualifying income for 2025 to 2026 is over £30,000.

Deferred beyond April 2027, date to be announced. HMRC exempts automatically where the 2024 to 2025 return:

  • included the SA102M pages as a minister of any religion or denomination (regulation 33)
  • included the SA103L pages as a Lloyd’s underwriting member (regulation 34)
  • claimed or transferred Married Couple’s Allowance, which is only for those born before 6 April 1935
  • claimed or transferred Blind Person’s Allowance

The allowance exemptions come from regulation 38. HMRC says these groups will need to use MTD in future and that it will publish the timeline later.

When do you have to apply instead?

An automatic exemption only works if HMRC can see the trigger on a return it already holds. You need to apply where:

  • the 2024 to 2025 return did not include one of the claims or pages above, but you reasonably expect the 2025 to 2026 or 2026 to 2027 return to include it
  • you are a partner who claimed, or expects to claim, averaging relief on the SA104 partnership pages
  • you are digitally excluded, which is never automatic and is explained in applying for a digital exclusion from MTD

The regulations support this. Regulation 39(b) gives the temporary exemption where the person “gives a notice satisfying HMRC” that they reasonably expect the condition to apply. HMRC warns that you should not apply without a good reason to expect the claim or page will be included. The SA109 group is wide: it covers non residents, people resident in the UK and another country, split year cases, and claims under the foreign income and gains regime, overseas workday relief and the temporary repatriation facility.

Applications are made by phone or in writing to Self Assessment general enquiries, or by agents through the Agent Dedicated Line. HMRC aims to respond within 28 calendar days. A single application can cover more than one reason.

How do the exemptions affect penalties?

HMRC’s application guidance says that while someone is exempt during 2026 to 2027, the existing Self Assessment late filing and late payment penalties continue to apply to them. HMRC’s penalties guidance adds that from April 2027 the new points based penalties will apply to everyone who files a personal Self Assessment return, so a person who becomes exempt in 2027 to 2028 stays under the new regime with a lower threshold of 2 points.

How does this work in practice?

Illustration only. Graham is a self employed illustrator and also lets a flat. His 2024 to 2025 return showed £70,000 of turnover and £12,000 of rent, and he claimed averaging relief on the SA103 pages. He is automatically exempt for 2026 to 2027 and does not need to contact HMRC.

His 2025 to 2026 return will show qualifying income well over £30,000, so he must start on 6 April 2027 whether or not he claims averaging again. If, instead, he had not claimed averaging in 2024 to 2025 but expected to claim it for 2025 to 2026 because of an unusually poor year, he would have needed to apply to HMRC for the 2026 to 2027 exemption.

What mistakes should be avoided?

  • Treating an exemption as a release from Self Assessment. The return is still due.
  • Assuming a trustee or executor exemption covers the individual’s own business or lettings.
  • Relying on a deferral that was never triggered. If the qualifying page was not on the 2024 to 2025 return, you must apply.
  • Assuming a VAT digital exclusion carries across automatically. HMRC asks people previously excluded from MTD for VAT to contact Self Assessment general enquiries; if circumstances are unchanged it will confirm the Income Tax exemption. A VAT exemption that arose from insolvency does not carry across.
  • Forgetting the deferrals end. The April 2027 group is back in from 2027 to 2028 if 2025 to 2026 qualifying income is over £30,000.

For the overall timetable, see our guide to Making Tax Digital for Income Tax.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.