HMRC has confirmed that older taxpayers who may struggle with the new Making Tax Digital system could be exempt from its reporting requirements. The digital reporting system became mandatory from April 6, 2026, for self-employed individuals and landlords with qualifying income above £50,000.
What Is Making Tax Digital?
Making Tax Digital for Income Tax is HMRC's new system for reporting self-employment and property income. Affected taxpayers must use compatible software to create and store digital records, correct records when necessary, send quarterly updates to HMRC, and submit their tax return along with any tax due.
The rollout is being introduced in stages. From April 2026, it applies to sole traders and landlords with qualifying income above £50,000. The threshold will fall to £30,000 from April 2027 and £20,000 from April 2028. HMRC has stated that a range of software options are available, including low-cost and free products for those with straightforward tax affairs.
Exemptions for Age and Disability
Liberal Democrat MP James MacCleary asked the Chancellor what assessment had been made of the potential impact of Making Tax Digital on people aged over 70. Responding on behalf of the UK Government, Treasury minister Dan Tomlinson said HMRC had worked with taxpayers, representative bodies, and software developers to ensure the system works for those who need to use it.
The Treasury Minister stated: "Where a taxpayer cannot use MTD for Income Tax, for example due to age or disability, they can apply for exemption from the MTD requirements." HMRC guidance explains that exempt individuals will not have to use Making Tax Digital for Income Tax but must continue reporting their income through Self Assessment in the usual way.
Qualifying for Exemption
The tax authority has outlined several reasons why someone may qualify for an exemption, including being digitally excluded. Taxpayers who are not automatically exempt must apply directly to HMRC. Those who believe they cannot use the digital system should apply for an exemption before they are required to join Making Tax Digital.
How to Apply
Applications for exemption can be made by contacting HMRC directly. Anyone granted an exemption can continue reporting their income through Self Assessment rather than using the new digital reporting system. Full guidance on Making Tax Digital is available on GOV.UK.
This update comes alongside other HMRC news, including a new online tool for Winter Fuel Payments, guidance on Inheritance Tax mistakes to avoid, a new tax guide for people due to retire, and information on Child Benefit ending for some this summer.
