What is MTD opt-out?
Last verified 31 October 2026
MTD opt-out is leaving Making Tax Digital for Income Tax after your qualifying income has fallen below the threshold. It is separate from an exemption, which exempts you from needing to join at all.
Why it matters to landlords
HMRC's guidance says you can opt out if your qualifying income was below the relevant threshold for three consecutive years, or if you amended your previous year's Self Assessment return to bring it below the threshold. HMRC checks your fourth quarterly update for the third year, so you do not have to wait for that year's tax return. The option appears in your online services account only if you are eligible.
Once you opt out you stop creating digital records and sending quarterly updates, and updates already sent for that tax year are deleted. You must still send a Self Assessment return for the year, but it does not have to be sent through MTD software. If you do not opt out you can carry on using the service, and your account will show that you do so voluntarily.
Example
Mei's rent drops to £18,000 after she sells a house. If her qualifying income is £20,000 or less in the 2026 to 2027 return, the 2027 to 2028 return and the 2028 to 2029 fourth quarterly update (due by 7 May 2029), she can opt out and would not need MTD for 2029 to 2030.
MTD £20,000 Threshold: Who Joins in April 2028 →