MTD Exemption UK 2026/27 — How to Apply to HMRC

If you are required to use Making Tax Digital (MTD) for Income Tax but it is not reasonable or practical for you to use digital tools, you can ask HMRC for an exemption. HMRC also accepts applications for some temporary or other exemption circumstances.

An exemption is not the same as being below the MTD income threshold. If you are outside MTD because your qualifying income is below the relevant threshold, you normally do not need to apply for an exemption. If you are in scope but cannot use MTD, you need to contact HMRC and explain your personal circumstances.

Who should apply?

You may need to apply if you are otherwise within MTD for Income Tax and one of the following makes digital reporting unreasonable or impractical:

• age, disability or another personal circumstance affects your ability to use digital tools;
• you live in a location where reliable digital access is not reasonably available;
• your religious beliefs conflict with using digital communications or technology;
• another circumstance means that keeping digital records and sending quarterly updates is not practical for you.

HMRC decides the application on the facts. Do not assume that having a preference for paper records, not owning a computer or needing help automatically produces an exemption. Explain the actual barrier, the support available to you and why the MTD process remains unreasonable or impractical.

HMRC's guidance also describes a temporary exemption until at least April 2027. The decision letter should explain the type of exemption and how long it lasts. An exemption can therefore be temporary, permanent in practical effect, or subject to a later review depending on the reason and HMRC's decision.

Exemption versus being outside MTD

These are different decisions:

The existing MTD Income Tax guide explains the qualifying-income timetable and quarterly workflow. This page focuses on the separate exemption process.

When should you apply?

HMRC says you should apply before you or the person you represent needs to use MTD for Income Tax. Its current guidance says applications can be made now where the relevant start date is:

• 6 April 2026 for the first threshold phase;
• 6 April 2027 for the next threshold phase;
• 6 April 2028 for the later phase, with HMRC advising applicants to apply from summer 2027 onwards.

If you have already been signed up and your circumstances have changed, HMRC says to apply and continue using MTD while you wait for the decision. Do not stop keeping digital records or sending required updates simply because you have contacted HMRC.

What information does HMRC need?

For an application for yourself, HMRC says you need your:

• National Insurance number;
• name and address;
• explanation of why you should be exempt;
• supporting information relevant to the reason for the application.

For a digital-exclusion application, also explain how you currently submit your tax return, whether somebody helps you, why digital reporting is not reasonable or practical, what an agent would do if you have one, and any additional support needs.

The application is based on the individual taxpayer's circumstances. A spouse, family member or accountant cannot create an exemption simply because they prefer a different process. If someone applies for you, they need the appropriate authority and must accurately explain your position.

How to apply

How long does HMRC take?

HMRC says it aims to respond within 28 calendar days of receiving the application. It may take longer if HMRC requests further information or needs to verify the circumstances.

The outcome should arrive by letter and explain whether the application is accepted, the type of exemption and how long it lasts. If an application is accepted for a period ending in April 2027, HMRC says you will not need to sign up and use MTD before the 2027/28 tax year at the earliest.

While an exemption applies, you normally continue to report through Self Assessment. HMRC also says that an exempt person remains subject to the current Self Assessment late-payment and late-filing penalties during the 2026/27 tax year; an exemption does not cancel the annual return or its payment deadlines.

What if HMRC refuses the application?

The decision letter should explain why HMRC did not accept the application and how to appeal. HMRC's current guidance says an appeal can normally be made within 30 days of the date on the decision letter.

An appeal must be made in writing, sent to the address in the decision letter and include any new information you want HMRC to consider. Use the digital-exclusion appeal subject line when that is the basis of the appeal, or the general MTD exemption appeal subject line for another exemption route.

If the application or appeal is unsuccessful, continue to keep the records and supporting documents needed for Self Assessment and prepare for MTD if it applies to you. The MTD penalties guide explains why missing the wider reporting process can create separate consequences.

Agents, family members and support

You can apply yourself. An authorised tax agent can apply for a client, and a friend or family member can apply with the person's authorisation. The application still depends on the taxpayer's own facts.

Before applying for digital exclusion, discuss the available support with an agent. HMRC says an agent using compatible software may be able to keep digital records and submit updates on the taxpayer's behalf, which can remove the need for a digital-exclusion exemption in some cases. That is a practical arrangement, not a guarantee that HMRC will accept or reject an exemption.

Do not send your National Insurance number or other personal details to an unsolicited caller or unofficial website. Use GOV.UK contact pages and the address or telephone route provided in HMRC's current decision and application guidance.

Frequently Asked Questions

Evidence and decision checks

A reliable mtd exemption application uk 2026 27 review starts by fixing the tax year and the date on which the relevant event happened. Record the person's or business's status, the income or transaction category, the amount before tax, tax already withheld, and any election or claim being relied on. Do not combine a headline figure with a final liability: the result can change when another income source, a payment date, an ownership interest or a qualifying condition is added.

Keep the source documents behind every important input. Depending on the subject, that may include payslips, invoices, bank statements, contracts, provider statements, travel records, HMRC notices, payroll submissions, valuations or correspondence. Where an amount is apportioned, write down the method and retain the underlying total. If a correction is made, preserve the original figure and explain the reason, date and evidence for the replacement.

Before relying on the result, check the current official guidance for the same tax year and jurisdiction. Distinguish enacted law from a consultation, draft measure, announcement or future proposal, and record the effective date. Reconcile the final estimate to the relevant return, payroll record or HMRC account. A calculator or explanatory guide can support a decision, but it cannot replace the eligibility test or the official filing and payment process.

Evidence and decision checks

A reliable mtd exemption application uk 2026 27 review starts by fixing the tax year and the date on which the relevant event happened. Record the person's or business's status, the income or transaction category, the amount before tax, tax already withheld, and any election or claim being relied on. Do not combine a headline figure with a final liability: the result can change when another income source, a payment date, an ownership interest or a qualifying condition is added.

Keep the source documents behind every important input. Depending on the subject, that may include payslips, invoices, bank statements, contracts, provider statements, travel records, HMRC notices, payroll submissions, valuations or correspondence. Where an amount is apportioned, write down the method and retain the underlying total. If a correction is made, preserve the original figure and explain the reason, date and evidence for the replacement.

Before relying on the result, check the current official guidance for the same tax year and jurisdiction. Distinguish enacted law from a consultation, draft measure, announcement or future proposal, and record the effective date. Reconcile the final estimate to the relevant return, payroll record or HMRC account. A calculator or explanatory guide can support a decision, but it cannot replace the eligibility test or the official filing and payment process.

Keep evidence of the practical barrier and review it if the taxpayer's access, health, business or income changes.

An exemption decision should be reviewed when the practical circumstances change.

Preparing an exemption application

Explain the practical facts that prevent digital compliance: access to broadband or a compatible device, health, age, religious objection, location, business structure or another relevant circumstance. Give dates and examples, and attach proportionate evidence. “I prefer paper” is not the same as demonstrating that digital reporting is impracticable for the person concerned.

Keep the application, reference, submission date and HMRC response. Until an exemption is confirmed, continue to monitor the ordinary reporting and payment calendar. An exemption from a digital method may not remove Self Assessment, record-keeping, VAT or employer obligations.

Review the position after a move, recovery from illness, a new business, a new device or a change in income. If an agent applies on the taxpayer's behalf, the taxpayer should still read the facts submitted and preserve the decision.

Evidence for an MTD exemption application

An exemption request should explain the practical barrier, not simply state that digital reporting is inconvenient. Set out the person's business activities, available internet or device access, software experience, health, age, religious objection or other relevant circumstance, and the steps already considered. Attach evidence that supports the facts while limiting personal information to what HMRC needs.

Keep a copy of the application, the date submitted, the case reference and any follow-up. Until HMRC confirms the exemption, continue preparing for the applicable reporting duty or document why compliance is impossible. An agent can help with the application, but the taxpayer remains responsible for providing accurate facts and checking the decision.

Review an exemption after a move, a change in health, a new device, a new business or a change in income. The existence of an exemption does not necessarily remove ordinary Self Assessment, payment or record-keeping duties, so keep the wider tax calendar active.

Start with HMRC's MTD exemption application guidance, then compare it with the MTD Income Tax guide and MTD penalties guide. This guide explains the published process and is not an individual HMRC decision.

Official sources

• HMRC: Apply for an exemption from Making Tax Digital for Income Tax
• HMRC: Find out if you can get an exemption
• HMRC: Use Making Tax Digital for Income Tax
• HMRC: Check what to do if HMRC signed you up
• GOV.UK: Self Assessment general enquiries

These HMRC and GOV.UK pages are the official references for eligibility, exemption applications, HMRC contact and the MTD process. Keep evidence of the reason for an exemption and check the current guidance before applying.