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Am I Exempt from Making Tax Digital? UK Exemption Guide (2026)
Updated: 13 March 2026 · MTD deadline: 6 April 2026 ( days away)
Making Tax Digital for Income Tax starts 6 April 2026 — but not everyone has to comply. Whether you need to depends on your income level, your business type, and your personal circumstances.
This guide covers exactly who is exempt, who isn't, and what to do if you're on the borderline.
The income thresholds
| From | Who must comply | Qualifying income threshold |
|---|
| 6 April 2026 | Self-employed / landlords | Over £50,000 gross |
| 6 April 2027 | Self-employed / landlords | Over £30,000 gross |
| TBC | Self-employed / landlords | Under £30,000 (no date set yet) |
⚠️ "Qualifying income" = gross income before expenses. If your freelance income is £55,000 but your expenses are £20,000 (profit = £35,000), you still need MTD because your gross income exceeds £50,000.
Who IS exempt from MTD (April 2026)
✅ You're exempt if:
- Your qualifying income is under £50,000 — you don't need to comply yet (but you may from April 2027 if over £30,000)
- You operate through a limited company — MTD for Income Tax applies to sole traders and landlords only, not limited companies
- You're employed only — PAYE employees with no self-employment or property income are not in scope
- You're digitally excluded — HMRC grants exemptions if you genuinely cannot use digital tools due to age, disability, location, or religious reasons
- You're a trust or estate — not currently in scope for MTD ITSA
- You have foster care income only — foster carers using the Qualifying Care Relief scheme are exempt
- You're a minister of religion — with specific types of income arrangements
Who is NOT exempt
❌ You must comply if:
- You're a sole trader with gross income over £50,000 — even if your profit is low after expenses
- You're a landlord with gross rental income over £50,000 — from UK or overseas property
- You have both self-employment AND property income that combined exceeds £50,000 — both sources count
- You use an accountant — having an accountant does not exempt you (but they can submit on your behalf)
- You don't like computers — preference is not the same as exemption
What about the borderline?
⚡ Income between £30,000 and £50,000?
You're safe from April 2026, but you'll need to comply from April 2027. Use this year to prepare: choose software, get used to digital record-keeping, and trial quarterly submissions voluntarily. Don't wait until the last minute.
⚡ Income just above or below £50,000?
HMRC uses your most recent tax return to determine whether you exceed the threshold. If your 2024/25 return showed qualifying income over £50,000, you need to comply from April 2026. If you expect your income to drop below the threshold, you can apply to HMRC for an exemption — but you'll need evidence.
How to apply for a digital exclusion exemption
If you genuinely cannot use digital tools, you can apply for an exemption by contacting HMRC:
- Call the MTD helpline: 0300 200 3310
- Explain why you cannot use digital tools
- HMRC will assess your case individually
- If granted, you'll continue filing paper returns
Valid reasons include:
- Age, disability, or health condition that prevents using software
- Living in an area with no reliable broadband or mobile signal
- Religious beliefs that prevent using electronic communications
- Being in an insolvency procedure
Not valid reasons:
- "I prefer paper"
- "I don't trust technology"
- "I've always done it this way"
- "I can't afford software" (free options exist)
What MTD actually requires
If you're not exempt, here's what you need to do from April 2026:
- Keep digital records — using MTD-compatible software (not just spreadsheets)
- Submit quarterly updates — summary of income and expenses every 3 months
- Submit an End of Period Statement (EOPS) — annual finalisation
- Submit a Final Declaration — replaces the current self-assessment tax return
For a complete setup guide, see our MTD Complete Guide.
Free and low-cost MTD software options
If cost is your concern, several free options exist:
- HMRC's own MTD software — basic but free
- QuickFile — free for businesses with under 1,000 transactions/year
- FreeAgent — free through NatWest, Mettle, or Tide business accounts
Full comparison: Free MTD Software for Sole Traders
Related guides
📦 Not Exempt? Get Ready Fast
The MTD Readiness Toolkit includes a compliance checklist, software comparison guide, quarterly deadline planner, and step-by-step setup instructions — everything you need to be MTD-ready before 6 April.
Get the MTD Readiness Toolkit — £14 →
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