The way self-employed individuals, sole traders and landlords submit information to HM Revenue and Customs (HMRC) will be changing very soon as Making Tax Digital (MTD) for Income Tax takes effect in less than six months.
It is essential that you are preparing ahead for April 2026, with new measures from HMRC to be introduced, which include keeping digital records of your accounts and submitting quarterly reports to HMRC.
While HMRC has officially announced its exemption criteria for MTD, you should press on with your preparations because very few individuals will be eligible to apply for an exemption.
It is worth knowing the exemption criteria but your focus should be on your preparations, organising your accounts, knowing how MTD will work and enhancing your processes to meet the requirements in place.
What exemptions has HMRC announced?
HMRC has set its exemption criteria for MTD, which clarifies that you must be digitally excluded to be exempt.
The criteria confirms that if your age, health condition or disability stops you from using devices such as a computer, tablet or smartphone to keep digital records, you would be digitally excluded, thereby exempt from MTD.
In addition to this, if you are a practising member of a religious society whose beliefs and practices do not align with the use of digital communications or keeping digital records, you can be classed as digitally excluded.
The last exemption stated in HMRC’s criteria is if you are unable to get internet at your home or location and cannot find an alternative location that does have a functioning internet connection.
It’s important to remember that HMRC will only accept these reasons when filing a claim to be digitally excluded from MTD.
HMRC is keen for taxpayers to utilise technology as it continues their shift to digitalise and modernise its services.
What should I do if I or someone I know meets the MTD exemptions?
If any of the points stated in HMRC’s criteria applies to you or someone you know, you should be contacting HMRC and filing a claim to be digitally excluded.
HMRC aims to review your exemption claim within 28 days and provide confirmation on whether you are exempt from MTD, but you need to be sure your reasons for claiming are clear.
Your preparations should continue even with the exemptions in place
Given how strict HMRC’s exemption criteria is, it is very unlikely to affect you and will only apply to a small number of individuals and your preparations shouldn’t stop because of these exemptions.
Your preparations should be getting under way especially with the MTD for Income Tax regulations taking effect in April. You need to know those regulations and begin to implement processes that will be compliant and allow you to adapt quickly.
MTD may not apply straight away, given there are thresholds in place, but for good practice purposes, it is wise to start following the rules in place and prepare ahead of time.
From April 2026, any self-employed individual, sole trader or landlord whose turnover is exceeds the £50,000 threshold will need to follow the MTD regulations.
This threshold then reduces to £30,000 from April 2027 and £20,000 from April 2028, which is why you need to prepare for when the MTD regulations will apply to you.
Talking with an experienced team of accountants can really enhance your preparations and our expert team is here to help you plan, prepare, and answer all your MTD concerns.
Ensure you and your business are prepared ahead of time and we can support you every step of the way so that you are ready for MTD.
Get MTD ready by getting in touch with our expert tax team.
