MTD for Income Tax exemptions
Some people do not have to use MTD for Income Tax. Some exemptions are automatic and some you must apply for. If you are exempt you still send a Self Assessment tax return as normal.
Not tax advice. This site explains GOV.UK guidance in plain English. Your own position depends on your tax returns and circumstances. Check GOV.UK or ask an accountant before you act.
Automatic and permanent (unless things change)
- Qualifying income of £20,000 or less
- No National Insurance number before the start of the tax year
- Trusts submitting an SA900, non-resident companies submitting an SA700, and personal representatives of someone who has died (your own income may still count)
- Your 2024 to 2025 return included the Lloyd's underwriter page (SA103L), or said you cannot provide information to HMRC and have a power of attorney, deputy, controller or guardian in place
Source: GOV.UK: exemptions.
Automatic until April 2027
You do not need MTD for 2026 to 2027 if your 2024 to 2025 return:
- claimed averaging relief as an individual (farmers, market gardeners, creators of literary or artistic works)
- claimed qualifying care relief (for example foster or kinship carers)
- included the SA107 trusts page or the SA109 residence page
You will then need MTD from 2027 to 2028 if your qualifying income is over £30,000 in 2025 to 2026. If you expect one of these to apply in 2025 to 2026 or 2026 to 2027 but it was not on your 2024 to 2025 return, you need to apply.
Automatic beyond April 2027
Ministers of religion (SA102M), Lloyd's members with self-employment or property income, and people who received or transferred Married Couple's Allowance or Blind Person's Allowance. HMRC says these people will need MTD in the future and will set a timeline later.
Digitally excluded: you must apply
You can apply if it is not reasonable for you to use software, for example because your age, health or disability stops you, your religious beliefs are incompatible with it, or you cannot get internet access at home, at work or somewhere suitable. HMRC will not accept an application only because you filed paper returns before, are unfamiliar with software, have few records, or because it costs extra time or money. Apply on GOV.UK.
Partnerships
Partnerships do not need MTD yet. A partner's share of partnership profit is not qualifying income, but your own self-employment or property income still counts.
Questions
I am over 70. Am I exempt?
Not because of age alone. You may be able to apply as digitally excluded if your age stops you using a computer, tablet or phone for your records.
If I am exempt do I still file a tax return?
Yes. Exempt people keep sending a Self Assessment tax return as normal.