HMRC Making Tax Digital exemptions guidance has been updated to provide greater clarity. The changes also align more closely with current legislation. The ICAEW Tax Faculty reviewed the updates and highlighted their importance. The guidance is particularly relevant for taxpayers who complete the SA109 supplementary pages as part of their Self-Assessment tax return.
The SA109 supplementary pages are used by taxpayers with certain residency, domicile or international tax matters. This can include individuals who are non-UK resident, claim split-year treatment, use the remittance basis, or have other cross-border tax considerations.
HMRC Making Tax Digital Exemptions for SA109 Taxpayers
Taxpayers who included the SA109 pages in their 2024/25 tax return will automatically qualify for exemption from Making Tax Digital for income tax for the 2026/27 tax year.
An exemption may still be claimed by taxpayers who did not include the SA109 pages in their 2024/25 return. This applies where they reasonably expect to complete these pages in either their 2025/26 or 2026/27 tax returns.
The previous requirement has now been removed from the guidance. Taxpayers no longer need to assess whether they were likely to include the SA109 pages specifically in their 2026/27 return.
HMRC also widened the application criteria by including the 2025/26 tax year. This broader approach now applies to other temporary exemptions, including:
- Averaging relief
- Qualifying care relief
- Certain income from trusts or estates
Additional examples have also been included in the guidance. These examples explain why a taxpayer may need to complete the SA109 pages. However, the list does not cover every possible scenario.
Clarifications on Other Exemptions
The revised guidance provides further clarification across several areas.
Partners who claimed averaging relief using the SA104 pages in their 2024/25 tax return will automatically qualify for exemption from Making Tax Digital for income tax for the 2026/27 tax year, provided they would otherwise fall within the regime, such as through property income.
HMRC has also confirmed that individuals without a national insurance number at the start of a tax year automatically qualify for exemption for that year.
In addition, terminology throughout the guidance has been refined to improve consistency with legislation and common UK usage. Clearer explanations now cover situations where an exemption applies because a person has granted power of attorney or where a legally appointed deputy, controller or guardian acts on their behalf.
What This Means for Taxpayers
These updates make the exemption rules easier to understand and reduce uncertainty for affected taxpayers.
Individuals who may fall within these categories should review their position carefully and consider whether they qualify for automatic exemption or need to submit an application to HMRC.