MTD Exemption Applications Now Open for £30k Taxpayers

Tax Queen

Tax Expert @ Pie

3 min read

HMRC is accepting exemption applications from self-employed people and landlords whose qualifying income was above £30,000 in the 2025-26 tax year. This group is due to be pulled into mandatory Making Tax Digital (MTD) for Income Tax from 6 April 2027, but if you're "digitally excluded" you may be able to apply to sit it out.

Does This Affect You?

If your qualifying income (from self-employment and/or property) was over £30,000 for 2025-26, this news is worth a few minutes of your time. You're not being forced onto Making Tax Digital just yet, that starts 6 April 2027, but the exemption process has now opened, and HMRC has been clear that applications need to go in ahead of when you'd actually be required to use it, not at the last minute.

For most people in this bracket, the honest answer is that MTD won't be as disruptive as it sounds. Filing quarterly updates through MTD-compliant software is designed to be a lighter version of what you're already doing for your annual return, just spread across the year instead of done in one go. This exemption route is really aimed at people who genuinely can't use compatible software to keep digital records or send quarterly updates, not everyone who'd simply rather not.

Who Actually Qualifies As "Digitally Excluded"

HMRC's bar for exemption is narrow, and it's worth understanding before you spend time applying. According to HMRC, being digitally excluded means it isn't reasonable for you to use compatible software to keep digital records or to submit quarterly updates and your tax return. That's assessed on your individual circumstances such as age, disability, location, or religious grounds, not a general dislike of using apps or spreadsheets. If you've never used bookkeeping software before but are otherwise capable of learning, that alone won't meet the threshold.

If you're unsure whether your situation might genuinely qualify, it can help to first understand what MTD actually asks of you day to day. Our guide on how to file your MTD quarterly update in the Pie app walks through exactly what's involved, which is often a good way to judge whether digital exclusion genuinely applies to you or whether the process is more manageable than expected.

Automatic Exemptions

A few groups qualify without needing to make a separate case:

Anyone who is not physically or mentally capable of providing information to HMRC, where power of attorney or a legally appointed deputy, controller, or guardian is already in place.
Taxpayers waiting on a National Insurance number before the start of the tax year (a temporary exemption). For example, someone who received their NI number on 30 April 2026 with qualifying income over £50,000 for 2024-25 would be exempt for 2026-27.
Anyone filing the SA103L supplementary page as a Lloyd's underwriting member.
Personal representatives handling a deceased person's estate, non-resident companies filing SA700, and trusts filing SA900 (including charitable trusts of non-registered pension schemes).

All of these groups still have to file a standard self assessment tax return each year. Exemption from MTD never removes that requirement, it only changes how you report your figures during the year.

What Won't Get You An Exemption

HMRC has been explicit that some common excuses simply won't be accepted, no matter how reasonable they might feel. You won't qualify just because you:

previously filed on paper;
aren't familiar with accountancy software;
only have a small number of digital records to create each year; or
think it'll cost extra time or money to set up MTD.

If any of those sound like you, it's worth getting ahead of things now rather than waiting until the 2027 deadline arrives. Getting comfortable with a taxation app well before you're required to use one tends to be far less stressful than switching over at the last minute, particularly during your first quarterly filing period

How And When To Apply

If you think your circumstances might genuinely meet the digitally excluded criteria, apply before you'd be required to start using MTD, not after your deadline has already passed. HMRC has said explicitly that the timing of your application should be based on when you'd actually need to start using Making Tax Digital for Income Tax.

If you've already signed up to MTD and your circumstances later change, you're still legally required to keep using it while HMRC processes your exemption application, which normally takes a few weeks. It's also worth knowing that even if you're already exempt from MTD for VAT, that exemption doesn't automatically transfer. You'll still need to contact HMRC directly by phone or in writing, provide your National Insurance number and VAT registration number, and explain your reason again, so they can confirm the same exemption also applies for Income Tax.

It helps to know where you sit in the wider rollout too. MTD is already mandatory for the £50,000 income group as of 6 April 2026, with the first quarterly update deadline having passed on 7 August 2026, and if you've already made the switch, our article on how to connect Pie to Making Tax Digital covers the setup step by step. The £20,000 threshold group isn't due to get exemption applications open until "summer 2027 onwards", so if that's you, there's no need to act yet, though it's worth bookmarking this page for when the window opens.

Getting Ready, Exemption Or Not

Whether you end up applying for an exemption or simply preparing to get set up for Making Tax Digital, it helps to know your options early rather than scrambling closer to 6 April 2027.

Take a look at why Pie to see what makes the switch straightforward, and how Pie works if you'd like a walkthrough of the quarterly filing process from record keeping through to submission.

Pricing is straightforward too, with no surprises buried in the small print. Check our pricing if you'd like to see what's included before your MTD deadline arrives, and if you're ready to get set up now, you can get started today for free.