HMRC has updated its guidance on applying for an exemption from Making Tax Digital for Income Tax, including when people due to enter the system in April 2027 can apply. For sole traders, landlords and the accountants who support them, the practical message is simple: anyone who may qualify should examine the rules and act before their start date, rather than waiting until digital reporting is already due.
What the exemption guidance covers
Making Tax Digital for Income Tax changes how affected people keep records and report information to HMRC. However, HMRC recognises that some people may be unable to meet the digital requirements. Its guidance covers applications for a digitally excluded exemption, which may be permanent depending on the circumstances, as well as a temporary exemption lasting until at least April 2027.
An exemption from Making Tax Digital does not remove the underlying tax responsibilities. Someone whose application is accepted must still report income and gains through a Self Assessment tax return in the usual way. Normal record-keeping obligations also continue.
HMRC says people who need to use Making Tax Digital from 6 April 2026 or 6 April 2027 can apply now. Those whose start date is 6 April 2028 should apply from summer 2027 onwards. An application should be made before the relevant Making Tax Digital start date.
Who can make an application?
Individuals can apply for themselves. An authorised tax agent can apply for a client, while a friend or family member can apply with the person’s authorisation. Each decision is based on the applicant’s own circumstances, even when somebody else handles the process.
Before applying, it is worth discussing the position with an accountant or agent. HMRC notes that if an agent can maintain compatible digital records and make submissions for the client, the agent may be able to meet the Making Tax Digital requirements on that person’s behalf. In that situation, a digitally excluded exemption may not be necessary.
Agents must already be authorised to act and must submit a separate application for each client. Friends or relatives also need formal authorisation, which can be provided in writing or verbally when the applicant is present during a call to HMRC.
What information will HMRC need?
An applicant should be ready to provide their National Insurance number, name and address, plus an explanation of why they believe an exemption applies. Supporting information may also be needed. If several possible grounds apply, HMRC asks for one application explaining all of them.
For a digitally excluded exemption, HMRC also wants to know how the person currently files a tax return, whether anyone helps them, whether they have an agent and what that agent does, and whether they have additional support needs. Someone applying for another person should understand that person’s circumstances well enough to explain them accurately.
Applications are made by telephone or post using HMRC’s Self Assessment contact details. Agents should use the Agent Dedicated Line. Postal applications need a clear subject line identifying whether they concern digital exclusion or another exemption.
What happens after applying?
HMRC aims to reply within 28 calendar days, although a decision can take longer if more evidence is needed. Applicants should continue keeping their normal records while they wait. Anyone already using Making Tax Digital whose circumstances have changed should continue using it until HMRC responds.
If an application is accepted, HMRC will confirm the type and duration of the exemption in writing. A temporary exemption through April 2027 means the person will not have to join Making Tax Digital until the 2027–28 tax year at the earliest.
If HMRC refuses an application, the decision letter should explain why and how to appeal. The usual appeal window is 30 days from the date on the letter, and an appeal must be made in writing. Businesses should therefore keep the letter and note the deadline immediately.
What small businesses should do now
Start by confirming when Making Tax Digital is expected to apply to you, rather than assuming the timetable. Then assess whether you can meet the digital requirements yourself or through an agent. If there is a genuine barrier, gather a concise account of your circumstances and any supporting evidence before contacting HMRC.
Do not treat an application as an automatic pause. Prepare for digital reporting while the decision is pending in case HMRC does not accept it. That could mean discussing software and record-keeping with an accountant, organising business income records, and understanding the appeal deadline.
Source: HMRC: Apply for an exemption from Making Tax Digital for Income Tax (updated 17 August 2026).
