Can you opt out of Making Tax Digital for Income Tax?

• You amended last year’s return. You amended your Self Assessment return for the previous tax year, and that brought your qualifying income below the threshold that applies to you.
• Three consecutive years below the threshold. Your qualifying income has been below the relevant threshold for three consecutive tax years. HMRC uses the income information from your fourth quarterly update of the third year for this check, so you do not have to wait for the third year’s tax return.

“Qualifying income” is your gross self-employment and property income before expenses, not your profit. If you are unsure what counts, see MTD qualifying income explained.

HMRC gives the example of someone whose qualifying income was above £50,000 in 2024 to 2025 and who therefore started MTD in April 2026. Looking ahead, HMRC says that person could opt out after the 2028 to 2029 tax year if their qualifying income is £20,000 or less on any of:

• their 2026 to 2027 tax return
• their 2027 to 2028 tax return
• their fourth quarterly update for 2028 to 2029

The fourth quarterly update for 2028 to 2029 must be sent by 7 May 2029. After that, the person would not need to use MTD for 2029 to 2030. This is HMRC’s illustration of the rule, not a prediction for your own figures.

You opt out using your HMRC online services account (or your agent’s agent services account). HMRC says the option only appears if you are eligible. If you do not see it, you cannot opt out yet, so there is nothing to apply for.

• You stop creating digital records and sending quarterly updates for MTD.
• Updates you have already sent for the opted-out year are deleted.
• You must still send a Self Assessment return for that year. You can use MTD software to do it, but you do not have to.
• You should check whether and when you will need to use MTD again, because thresholds and your income can change.

You do not have to opt out. HMRC says you can keep using MTD, and your account will show that you are using it voluntarily. Some people choose to keep digital records and quarterly updates because the figures help with planning, or because their software already makes it easy.

Opting out is for people who no longer need to use MTD because of their income. An exemption is a different route for people who would have to use MTD but for whom it is not reasonable to use compatible software, for example because of disability, age, location or religious reasons. Someone with an exemption still files a Self Assessment return, and their penalties change. Read who is exempt from MTD if that sounds like your situation.

This is general information from HMRC’s published guidance, read in October 2026, and the rules and thresholds can change. It does not tell you whether you are eligible to opt out, because that depends on your qualifying income in each year, any amended returns and your own circumstances. If you are close to a threshold, or you have several sources of income, ask an accountant before relying on it.