Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) marks one of the most significant changes to personal tax administration in many years. From 6 April 2026, digital record-keeping and quarterly reporting will become compulsory for self-employed individuals and landlords whose combined gross trading and property income for 2024/25 is £50,000 or more.
Although many taxpayers are preparing for the shift to software-driven reporting, HMRC recognises that some people cannot interact with digital tools because of age, disabilities, religious beliefs or lack of internet access. In these circumstances, the law allows HMRC to grant an exemption from MTD for ITSA.
This article explains who qualifies, what reasons HMRC accepts, how to apply, and what evidence is needed.
Who Must Comply with MTD for ITSA?
MTD for ITSA applies to:
- Self-employed individuals
- Landlords with UK or overseas property income
- Those whose combined gross turnover from these sources is at least £50,000 in 2024/25
Once within the regime, taxpayers must:
- Keep digital records
- Submit quarterly updates via MTD-compatible software
- Submit an End of Period Statement (EOPS)
- Submit a Final Declaration to replace the current Self Assessment return
For those who cannot use digital solutions, an exemption provides relief from these obligations.
Who Counts as Digitally Excluded?
HMRC accepts digital exclusion only where the taxpayer is genuinely unable to use digital tools. This is a strict test.
Accepted reasons include:
1. Age-Related Limitations
Some older taxpayers may struggle with technology. If age-related factors prevent them from using smartphones, computers or tablets to maintain records or submit digital updates, they may qualify for exemption.
2. Health Conditions or Disabilities
Where a physical or mental condition limits the ability to interact with digital systems, HMRC may grant an exemption. This includes conditions that affect:
- mobility
- vision
- motor skills
- cognitive processing
- long-term health impairments that make digital communication impractical
3. Religious Grounds
If a taxpayer belongs to a religious order whose beliefs conflict with the use of digital devices or electronic communication, they can apply for an exemption. This must be consistent with their lifestyle, meaning they do not use digital tools in their personal or business life.
4. Location-Based Barriers
Some taxpayers cannot access reliable internet because of where they live or work. In these cases, HMRC will consider whether:
- broadband is unavailable
- mobile data coverage is inadequate
- use of public internet access is impractical or unsuitable
The taxpayer must show that connecting from a suitable alternative location is not possible.
Reasons HMRC Will Not Accept
Some taxpayers believe they qualify for exemption because digital filing is inconvenient. However, HMRC does not consider inconvenience, cost or lack of familiarity with technology as valid reasons.
Claims will be rejected if the only reason is:
- preferring paper returns
- unfamiliarity with accounting software
- doing minimal record-keeping each year
- needing extra time or money to comply
- feeling uncomfortable using technology but otherwise capable
HMRC’s position is that these individuals can seek help from agents or use straightforward software products.
The Position for Those Already Exempt from MTD for VAT
If a taxpayer already has an exemption from MTD for VAT on the grounds of digital exclusion, HMRC will generally accept that they qualify for MTD for ITSA exemption, provided their circumstances have not changed.
However, they must still apply separately for the ITSA exemption. HMRC does not carry exemptions over automatically.
How to Apply for an MTD for ITSA Exemption
Applications must be made in writing and submitted before the taxpayer’s MTD start date.
Your written request must include:
- National Insurance number
- Full name and postal address
- A description of how tax returns are currently submitted (including any assistance from an agent or relative)
- Detailed reasons for digital exclusion
- Evidence supporting the claim
- A note of any agent acting on your behalf
- Information on additional needs that affect your ability to use digital systems
The application should be sent to:
Self Assessment
HM Revenue and Customs
BX9 1AS
An agent can apply on behalf of someone who is digitally excluded.
What Evidence HMRC Wants to See
Supporting details depend on the reason for the claim:
- For health issues: medical evidence where possible
- For age-related exclusion: explanation of digital limitations
- For religious reasons: a description of beliefs, including practices that restrict digital use
- For location-based issues: evidence of connectivity problems
HMRC reviews applications carefully and may request additional information.
When Exemption Will Not Be Granted
If a taxpayer is capable of using digital tools but chooses not to, HMRC will not approve the application. For example:
- A taxpayer with mild discomfort using computers but access to support
- A taxpayer who refuses digital tools but continues to use a smartphone for other tasks
- A taxpayer who prefers paper-only methods but does not have barriers preventing digital use
Where a taxpayer needs help but does have support available, such as an agent or family member who can file digitally on their behalf, exemption is unlikely.
Automatic Exemptions
Several groups are automatically excluded from MTD for ITSA and do not need to apply:
- Trustees, including charitable trust trustees
- Personal representatives administering an estate
- Non-resident companies
- Lloyd’s underwriters in respect of underwriting income
- Individuals without a National Insurance number on 31 January before the start of the tax year
These groups cannot sign up voluntarily even if they wish to.
Practical Steps if You Think You Qualify
If you believe digital exclusion applies:
- Assess your circumstances honestly
Consider whether your barriers are absolute or whether digital filing could be managed with support. - Gather evidence early
HMRC is more likely to accept well-supported applications. - Prepare a clear written statement
Explain the reasons with enough detail for HMRC to understand your limitations. - Apply well before the start date
This avoids compliance issues if the exemption is granted after the deadline.
Seek professional help if unsure
An adviser can help present your circumstances clearly and ensure your application covers the necessary information.
Message Yorkshire Accountancy for tailored advice.
This article is for general information only; seek tailored advice before acting.
