MTD Exemptions for Landlords: Digital Exclusion Rules for 2026/27

Who needs an MTD exemption in 2026/27?

For 2026/27, a landlord only needs an MTD exemption if they would otherwise be required to use Making Tax Digital for Income Tax. The first mandatory group started on 6 April 2026 and covers individuals registered for Self Assessment with property income, self-employment income, or both, where qualifying income for 2024/25 was over £50,000.

Qualifying income means gross income before expenses. For landlords, that means rent before deducting mortgage interest, repairs, letting agent fees, insurance or other allowable costs. If you also have self-employment turnover, HMRC adds that to your property income for the threshold test.

The thresholds reduce in later years, so a landlord below the 2026/27 entry point may still come in later.

Automatic MTD exemptions landlords should check first

Some exemptions are automatic, so you do not need to apply to HMRC. For landlords, the most common practical one is income-based: if you are below the relevant threshold for the year, you are not required to use MTD for that year. From the full £20,000 phase, HMRC says those with qualifying income of £20,000 or less are automatically exempt unless circumstances change.

Other automatic exemptions are more specific. Partnerships do not currently need to use MTD for Income Tax, although HMRC says a timetable will be set out in future. Trusts filing SA900, non-resident companies filing SA700, and personal representatives filing for someone who has died are also outside the normal individual landlord MTD route.

You are also automatically exempt if you do not have a National Insurance number before the start of the tax year. HMRC gives the example of someone receiving a National Insurance number on 30 April 2026 being exempt from MTD for 2026/27, even if their 2024/25 qualifying income was over £50,000.

• If your 2024/25 qualifying income was £50,000 or less, you do not need an exemption for the 2026/27 MTD start.
• If your income later rises above a future threshold, you may come into MTD from a later tax year.
• Being exempt from MTD does not remove your Self Assessment obligations.

Digital exclusion: the main exemption route for landlords

Digital exclusion means it is not reasonable for you to use compatible software to keep digital records or send information to HMRC. HMRC can grant a digital exclusion exemption that may be permanent, depending on your circumstances.

This is a personal test. HMRC looks at your circumstances, not just the rental business. An authorised agent, friend or family member can apply for you, but the exemption still depends on whether it is reasonable for you to comply.

Examples that may support a digital exclusion application include a health condition or disability that prevents you using a computer, tablet or smartphone for MTD tasks, age-related barriers that make digital record keeping unreasonable, no usable internet access at home or at the rental business and no suitable alternative location, or religious beliefs that are incompatible with digital communications or electronic records.

What will not usually count as digital exclusion

HMRC has been clear that discomfort with software is not enough on its own. A landlord who is capable of using digital tools, but would rather not, is unlikely to be treated as digitally excluded.

This matters for smaller landlords with one or two properties. Having a low number of rent and expense entries may make MTD feel disproportionate, but it does not automatically make it unreasonable to use compatible software.

If your main concern is choosing the right system, compare MTD software for landlords before applying for an exemption. If you use an accountant or tax agent, also read our guide to MTD for landlords with an agent, because an agent may be able to meet the digital filing requirements for you.

• You have always filed a paper tax return.
• You are unfamiliar with accounting software.
• You only have a small number of rental records each year.
• MTD will cost more than your current process.
• MTD will take extra time to set up.
• You do not like bank feeds or cloud software.

How to apply for an MTD exemption

If you are not automatically exempt, you must contact HMRC before you are required to use MTD. For the 2026/27 group, that means applying as soon as possible if you have not already done so.

You can apply yourself. An authorised tax agent can apply for you. A friend or family member can also apply if you authorise them, either in writing or by phone while you are present to give verbal authorisation.

Applications are made through HMRC’s Self Assessment contact route, by phone or in writing. If writing, use the heading Making Tax Digital for Income Tax - digitally excluded application and include enough detail for HMRC to understand why using compatible software is not reasonable.

• Your full name, address and National Insurance number.
• How you currently submit your Self Assessment tax return.
• Whether anyone helps you with the return.
• Why you believe you are digitally excluded.
• Any evidence or practical details supporting the application.
• Whether you have an accountant or agent, and what they do for you.
• Any additional needs so HMRC can provide the right support.

What happens if HMRC accepts or refuses your exemption?

If HMRC accepts your exemption, you do not have to keep MTD digital records, send MTD quarterly updates or submit your tax return through MTD-compatible software. You still need to report your rental income and gains through Self Assessment and pay any tax due by the normal deadline.

If HMRC refuses, you should assume you are in MTD from your required start date unless you successfully challenge the decision or HMRC later accepts a fresh application. If the issue is not true digital exclusion, your practical route may be simpler software, spreadsheet bridging software, or using an agent.

If your circumstances change, treat the exemption as something to review. For example, if your internet access improves, your health position changes, or someone is now able to manage digital records for you, your exemption may no longer be appropriate.

Step by step

1. 1

   Check your threshold position

   Add your gross property income and gross self-employment income for the tax year HMRC is checking. For 2026/27, use 2024/25 and check whether the total was over £50,000.

2. 2

   Check automatic exemptions first

   Consider whether you are outside MTD because you are below the relevant threshold, do not have a National Insurance number before the start of the tax year, are acting in a trust or personal representative capacity, or fall into another automatic category.

3. 3

   Decide whether digital exclusion genuinely applies

   Focus on whether it is reasonable for you to use compatible software. Identify the practical barrier, such as disability, health, age-related difficulty, remote location, religious belief or another genuine reason.

4. 4

   Gather details for HMRC

   Prepare your National Insurance number, name, address, current filing method, details of anyone who helps you, your reason for digital exclusion, supporting evidence and any additional needs.

5. 5

   Contact HMRC before your MTD start date

   Apply through HMRC’s Self Assessment contact route by phone or post. If writing, use the heading Making Tax Digital for Income Tax - digitally excluded application.

6. 6

   Keep a fallback plan

   Do not stop preparing for MTD while waiting. If HMRC refuses, you may need compatible software, spreadsheet bridging software or an agent arrangement quickly.

A worked example

Priya owns two buy-to-let flats and also does occasional consultancy work as a sole trader. She wants to know whether she needs an MTD exemption for 2026/27.

Priya is over the 2026/27 MTD threshold because HMRC uses the £54,000 gross qualifying income figure, not the £36,000 profit figure. Unless an exemption applies, she needs to use MTD from 6 April 2026.

Frequently asked questions