Quick answer
You’re automatically exempt from MTD for Income Tax if your qualifying income is £20,000 or less, you don’t have a National Insurance number, or you file as a trust, a non-resident company or the personal representative of someone who has died. If it isn’t reasonable for you to use digital tools, you can apply to HMRC for a digital exclusion exemption.
Two kinds of exemption
Some exemptions are automatic. HMRC applies them using information it already holds, so you don’t need to contact anyone. Others you have to apply for, by telling HMRC why you’re exempt.
Automatic exemptions
Your qualifying income is £20,000 or less.
You don’t have a National Insurance number before the start of the tax year.
You file as a trust, a non-resident company, or the personal representative of someone who has died.
You’re a Lloyd’s member, for that income.
You’re not physically or mentally capable of dealing with HMRC and have a power of attorney or legal representative in place.
Temporary exemptions until April 2027
If your 2024/25 tax return included averaging relief, qualifying care relief, the trust income pages (SA107) or the residence and remittance basis pages (SA109), you don’t need to join until at least April 2027. You don’t need to contact HMRC for this.
Exemptions that continue after April 2027
If you claim Married Couple’s Allowance or Blind Person’s Allowance, or you file the Ministers of Religion pages (SA102M), you’re also automatically exempt.
Digital exclusion: exemptions you apply for
You can apply for an exemption if it isn’t reasonable for you to use compatible software to keep digital records, send quarterly updates or file your return. HMRC accepts reasons such as:
your age, health or a disability stops you using a computer, tablet or smartphone
you belong to a religious society or order whose beliefs are incompatible with digital communication or digital records
you can’t get internet access at home or at your business because of where you are, and can’t reasonably get it somewhere else
You apply by contacting HMRC. See HMRC’s guidance on applying for an exemption for how.
You can also apply in advance if you expect to claim averaging relief, qualifying care relief, Married Couple’s Allowance or Blind Person’s Allowance, or to file the SA107 or SA109 pages, for a year you’d otherwise be in MTD.
Not exempt, just not required yet
Partnerships will join MTD for Income Tax later. HMRC hasn’t set the date yet.
Anyone under the threshold for their start year isn’t required to join that year.
Leaving MTD later
Once you’re in, if your qualifying income falls below the threshold for three tax years in a row, you can choose to opt out.
The full list is in HMRC’s guidance on MTD exemptions. Not sure where you stand? Read who needs MTD for Income Tax.