Making Tax Digital Exemptions

Our Making Tax Digital team have summarised below the exemptions announced so far

Automatic exemptions until April 2027

• Taxpayers in receipt of income from trusts or estates.
• Taxpayers claiming averaging adjustments (mainly farmers, musicians, writers and other creative artists).
• Taxpayers claiming qualifying care relief – e.g. foster carers who would otherwise have to join MTD due to another source of qualifying income.
• Taxpayers who filed non-residence (SA109) supplementary pages with their 2024/25 tax return, and reasonably expect to need to do so again in 2026/27.

Automatic exemptions – for an unlimited period

• Individuals who do not have a National Insurance Number (assessed at 5 April, the day before the date they would otherwise have to join MTD).
• Individuals claiming qualifying care relief (including foster carers and kinship carers) who have no other source of qualifying income.
• Lloyds underwriters who have no other source of qualifying income.
• Trustees, executors and personal representatives – in that capacity only.
• Taxpayers who lack physical or mental capacity and have given enduring power of attorney or lasting power of attorney to someone to manage their affairs.

 Exemptions until April 2027 (subject to an application)

• Taxpayers with qualifying income over £50,000 who would otherwise be expected to join MTD from April 2026 can apply for a temporary exemption from MTD until at least April 2027 if they have reason to believe they will need to file SA109 non-residence supplementary pages with their tax return in 2026/27.

Unlimited period exemptions (subject to application)

• Taxpayers who are 'digitally excluded' can apply to HMRC for exemption from MTD for an unlimited period if they have circumstances which make it not reasonably practicable to comply with MTD:

1. 1. age, health condition or disability that stops you from using a computer, tablet or smartphone to keep digital records or submit them to HMRC.
   2. practising member of a religious society or order whose beliefs are incompatible with using digital communications or keeping digital records, and you do not use a computer, tablet or smartphone for business or personal use.
   3. you cannot get internet access at your home or business because of your location and cannot get access at a suitable alternative location.

• Depending on the facts and circumstances, it may be possible to apply for exemption on the grounds it is ‘not reasonably practicable’ for you to comply with MTD (for example because you are winding down your business and have very low profits which are extinguished by the costs of complying with MTD). However, you would need to convince HMRC that you meet the requirements for this exemption.

Fixed Term only exemptions (either for the current parliamentary term, or until April 2027).

• Ministers of religion who file SA102M supplementary pages with their tax return.
• Recipients and transferors of the Married Couple’s Allowance or the Blind Person’s Allowance.
• Lloyds underwriters in receipt of other qualifying income.

Applications for exemption can be made by post or by phone, by individual or agent.

If you have any questions or would like to understand how these exemptions from MTD may apply in specific circumstances, please do not hesitate to get in touch with our MTD team.

Our contact details can be found here.