HMRC has introduced a new service allowing landlords and the self-employed to apply for exemption from Making Tax Digital for income tax (MTD IT). Applications must be made by phone or in writing, with HMRC aiming to respond within 28 days.
From April 2026, self-employed individuals and landlords with gross incomes above £50,000 will be required to comply with MTD IT. From 2027 onwards, those with lower income thresholds will be brought into the scheme.
The Low Incomes Tax Reform Group (LITRG) encourages taxpayers who cannot reasonably manage their tax affairs online to check if they qualify for an exemption. HMRC guidance defines digital exclusion as the unreasonable use of compatible software to keep or submit digital records. Exemptions exist for certain groups, such as those without a national insurance number.
Anyone applying should clearly label their correspondence “Making Tax Digital for income tax — digitally excluded application”. Relatives, friends or authorised agents may apply on someone’s behalf. While a decision is pending, taxpayers are advised to prepare for MTD if the application is declined.
LITRG also recommends that those already exempt from MTD for VAT confirm with HMRC whether their exemption will extend to income tax. Around 900,000 taxpayers are expected to fall within MTD from 2026, including an estimated 216,000 without professional support. Many of these will be on modest incomes, making clear and accessible HMRC guidance essential.
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