Can you stop using Making Tax Digital? Opting out and ceasing

HMRC's example of opting out

If your qualifying income was over £50,000 for 2024 to 2025, you start in April 2026. You could opt out after the 2028 to 2029 tax year if your qualifying income is £20,000 or less on your 2026 to 2027 return, on your 2027 to 2028 return, and on your fourth quarterly update for 2028 to 2029, sent by 7 May 2029. You would then not need MTD for 2029 to 2030.

HMRC uses your fourth quarterly update for the third year to check, so you do not have to wait for that year's tax return. The option only appears in your HMRC online account if you are eligible.

Basis: If your circumstances change

If you opt out

You stop keeping digital records and sending quarterly updates. Any updates already sent for that tax year are deleted. You still send a Self Assessment return for that year, with or without your MTD software. You can also choose to carry on voluntarily.

Basis: If your circumstances change

If your income stops

Income from a business or property you have stopped still counts towards your qualifying income if you have another source that carries on.

If all of it stopped before 6 April 2026, you do not need MTD, but you still send your tax return for the relevant year and tell HMRC if your records do not show the cessation.

The following instruction is specifically for people HMRC has signed up for the 2026 to 2027 tax year: if all income stopped on or after 6 April 2026, use MTD software for an update up to the cessation date and for the 2026 to 2027 return. This is not a rule that every person who stops trading after that date must join MTD.

For a different start year or other circumstances, confirm your obligations with HMRC using your actual cessation date and MTD status before deciding to start or stop.

Basis: Work out your qualifying income · Check what to do if HMRC has signed you up · If your circumstances change