SALF1440 - Self Assessment: the legal framework: Exemptions: Exemptions by reference to amount of income
A relevant person with qualifying income below specified amounts will be exempt from Making Tax Digital (MTD) obligations.
MTD for Income Tax will be introduced as follows:
- from April 2026 (Y), for those with qualifying income over £50,000 in tax year 2024-25 (Y-2)
- from April 2027 (Y), for those with qualifying income over £30,000 in tax year 2025-26 (Y-2)
- from April 2028 (Y), for those with qualifying income over £20,000 in tax year 2026-27 (Y-2)
For 2026-27 tax year
This exemption applies to digital obligations for tax year 2026-27 if a relevant person’s qualifying income is below the qualifying amount for 2024-25 (£50,000 see below).
For any tax year after 2026-27 where no obligation applied in the previous year
This exemption applies after tax year 2026-27 if there was no digital obligation in the previous year (Y-1) and the amount of qualifying income for tax year Y-2 is less than the qualifying amount for tax year Y-2.
For any tax year after 2028-29 where digital obligation applied in previous three years
This exemption applies to a person for a tax year after 2028-29 if the digital obligation applied to the person for the previous three years and the amount of qualifying income for each of those three years was below the qualifying amount for that year. This ensures continuity for the person for at least four years. It means that, from tax year 2029-30 onwards, for a person who is subject to digital obligation, they will continue to be subject to digital obligation until they have had three consecutive years in which their qualifying income was below the qualifying amount. This ensures continuity for a minimum of four tax years and avoids fluctuations in income leading to yearly changes in whether digital obligations apply.
The “qualifying amount” for a tax year is:
- £50,000 for the tax year 2024-25
- £30,000 for the tax year 2025-26
- £20,000 for the tax year 2026-27 and any subsequent tax year