Be sure to head over to our Making Tax Digital hub, full of guides, software reviews, important dates and more.
HMRC is now accepting applications for exemption from Making Tax Digital for income tax if you’re digitally excluded. With MTD for income tax starting in April 2026, it’s time to work out who qualifies and how to apply.
What counts as digital exclusion?
The rules recognise two groups of people who can be exempt from MTD:
Religious exemptions apply to members of religious societies or orders whose beliefs don’t allow them to use electronic communications or keep electronic records. This is pretty rare, but it’s there if you need it.
Practical exemptions are much more common. You qualify if it’s not “reasonably practicable” for you to use MTD because of your age, disability, location, or any other genuine reason. HMRC takes quite a strict view on what counts as reasonable, so you’ll need a solid case.
What HMRC will accept
Your application is more likely to succeed if your age, health condition or disability prevents you from using computers, tablets or smartphones, or if you genuinely cannot get internet access at home or your business and there’s no suitable alternative location available.
It’s worth noting that having multiple challenges strengthens your case. For instance, if you’re dealing with both the extra cost of MTD and health issues that make using technology difficult, you’ve got a stronger application than if it’s just about the money.
What won’t work as an excuse
HMRC has been clear about what they won’t accept as reasons for exemption on their own:
- You’ve always filed paper returns before
- You don’t know how to use accounting software
- You only have a few transactions each year
- It’ll cost you extra money or take more time
Extra cost alone won’t qualify you for exemption, but it could help your case if combined with age or health issues.
The agent question
This is where things get a bit murky. HMRC says that taxpayers with an agent “may not need to apply for exemption” if the agent can handle all their MTD obligations for them. But what if relying on an agent isn’t practical for you? Maybe you live remotely, or your circumstances make it difficult to work with an agent regularly. The guidance doesn’t really clear this up, so if you’re unsure, it’s probably worth applying anyway.
How to apply
You’ve got two options for applying: phone or post. Applications must be made by calling or writing to self assessment: general enquiries. If you’re writing, use the title “Making Tax Digital for income tax – digitally excluded application”.
You can apply yourself, or someone can apply on your behalf if they’re authorised (like your agent or a family member).
You’ll need to provide your National Insurance number, name and address, information about how you currently file your tax return, whether you have an agent and what they do for you, why you believe you’re digitally excluded, and any additional needs you have.
The more detail you provide upfront, the better. Vague applications are likely to result in HMRC asking for more information, which just drags the whole process out.
What happens next?
HMRC will review your application and send you a letter confirming whether it’s been accepted. If you disagree with their decision, you have 30 days to appeal.
While HMRC says they aim to reply within 28 days, there’s no guarantee. If they need more information or there’s any back and forth, it could take considerably longer. The guidance suggests you “should prepare to use” MTD while waiting to hear back, in case your application isn’t accepted. Though honestly, if you’re applying for digital exclusion, preparing to use digital systems seems rather contradictory.
Already exempt from MTD for VAT?
If you’re already exempt from MTD for VAT, your exemption won’t automatically carry over to income tax. You’ll need to contact HMRC with your NI number, VAT registration number, the reason you were exempt from VAT, and confirmation of whether your circumstances have changed.
If nothing’s changed since your VAT exemption was granted, HMRC will confirm the exemption carries over. If anything has changed, you’ll need to go through the full application process. Be careful here though, as this could trigger a review of your existing VAT exemption too.
One exception: if your VAT exemption was due to insolvency, that won’t apply for income tax and you’ll need to join MTD.
When to apply
Timing matters here. If you’re due to start MTD in April 2026, you can apply now. If you’re not due to start until April 2027 or 2028, wait until the summer before your expected start date.
Don’t leave it until the last minute. With potential delays and the possibility of needing to provide additional information, getting your application in early gives you breathing room.
The bottom line
If you genuinely struggle with digital technology or have circumstances that make MTD impractical, it’s worth applying for exemption. Just be prepared to make a clear case with proper evidence. HMRC isn’t handing out exemptions freely, but they will approve genuine cases.
Remember, this exemption isn’t about avoiding modernisation for the sake of it. It’s about recognising that not everyone can reasonably adapt to digital systems. If that’s you, don’t be afraid to apply. The worst they can say is no, and you can appeal if you disagree with their decision.
📩 Get in touch and we’ll break it down with no jargon – just Dead Simple support from real humans.
