Digitally excluded taxpayers urged to consider Making Tax Digital exemption - 1st October 2025

Making Tax Digital (MTD) for income tax. Taxpayers who can’t manage their tax affairs online and are due to start using MTD are urged to check whether they can claim an exemption from the initiative, which launches in six months’ time.

From next 6 April 2026, people who are self-employed and/or landlords and declare more than £50,000 of gross income in their 2024/25 self-assessment tax return will be legally required to follow the new MTD rules.

HMRC has recently published new guidance for people who are digitally excluded, setting out how they can obtain a MTD exemption. This is in addition to automatic exemptions already in place for certain groups, including for people without a National Insurance number. Digitally excluded taxpayers will need to submit an exemption application by phone or post and should receive a response within 28 days. HMRC says that, for MTD for income tax, digitally excluded means it’s not reasonable for the individual to use compatible software to keep digital records or submit them to HMRC. Please see: Apply for an exemption from Making Tax Digital for Income Tax if you are digitally excluded.

Taxpayers already exempt from MTD for VAT should check with HMRC that their exemption will be extended to cover the income tax programme. As we mentioned in our previous Bulletin, HMRC has updated its guidance on exemptions and, although it was previously announced that sole traders and landlords who were exempt from MTD for VAT would automatically be exempt from MTD for income tax, HMRC has now changed how this process will work. HMRC’s recent updates include information about how people can contact it if they're exempt from using MTD compatible software for VAT returns. The guidance also says that if anyone is exempt from sending online returns for MTD for VAT, they should contact HMRC when the exemptions application process opens for MTD for income tax. If their VAT exemption is due to being insolvent, they’re not exempt from MTD for income tax.

According to recent HMRC statistics, tax return data from 2023/24 suggests that around 864,000 taxpayers are expected to be subject to MTD from 6 April 2026. Around a quarter of these (216,000) are believed to not use the services of an accountant or tax adviser.  (These figures are expected to change once 2024/25 tax returns – the basis for MTD qualification – are processed.) This will likely include some on low or modest incomes who will be particularly reliant on HMRC for help and guidance.

The Low Incomes Tax Reform Group (LITRG) has also provided some further information:

Time for taxpayers to get ready for Making Tax Digital for income tax;

Making Tax Digital for income tax.