MTD for ITSA exemptions

An exemption from Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is available in limited circumstances. Where an exemption is granted, the taxpayer does not need to comply with the requirements of MTD for ITSA. Taxpayers may be exempt if they are unable to comply with MTD for ITSA on grounds of age or disability or on religious grounds.

Taxpayers who are not automatically exempt need to apply for an exemption. HMRC have published guidance on applying for an exemption which covers temporary exemptions until at least April 2027 and digitally excluded exemptions, which depending on the taxpayer’s circumstances may be permanent.

An application can be made by the taxpayer themselves or by an agent or family member on their behalf. However, it should be noted that where the agent is using MTD-compatible software to keep digital records and submit them to HMRC, they will be able to meet the requirements of MTD for ITSA on the taxpayer’s behalf an exemption will not be forthcoming.

Where a taxpayer would otherwise be within MTD for ITSA for 2026/27 or 2027/28, they can apply for an exemption now. Taxpayers who would otherwise be within MTD for ITSA for 2028/29 will be able to apply for an exemption from the 06^th April 2027.