Checked against GOV.UK on 14 August 2026
Opting out is not a preference setting. It becomes available when the numbers say you no longer need to be in.
Once you start using the service, if your qualifying income drops below the relevant threshold for 3 tax years in a row, you can choose to opt out.
You select the option in your HMRC online services account, or your agent does it in their agent services account. The option only appears if you are eligible.
Where you are opting out because your qualifying income has been below the relevant threshold for three consecutive years, you do not need to wait until you have sent the tax return for the third year.
You must still send a Self Assessment tax return for that tax year. You do not have to use your MTD software to send it, though you can if you prefer.
Opting out is not the same as becoming exempt. If your circumstances change you may become exempt — and that changes which penalty regime you sit under. Become exempt in the 2026 to 2027 tax year and you return to the current Self Assessment late payment and late submission penalties. Become exempt in 2027 to 2028 and you stay under the new penalties, because from April 2027 they apply to everyone who submits a personal Self Assessment tax return.
HMRC considers changes to Self Assessment returns when checking qualifying income. A change made before the start of a tax year can move you in or out for the upcoming year. A change made after the start of a tax year can only move you out, not in — changes that push you above the threshold are not considered for that tax year. If you have already signed up, you can carry on voluntarily or opt out.
General information about UK tax rules, not tax advice. Your own circumstances and HMRC's official guidance govern your position. If you are unsure, speak to an accountant or contact HMRC. Tax rules change — if this page is more than a few months old, check the GOV.UK pages linked above. Found an error? Email hello@getaxionlabs.com and we will correct it.