This page lists FOI requests related to Cessation and MTD ITSA and the associated HMRC responses. Sub-pages provide more detail and analysis.
The original FOI request concerning MTD ITSA and Cessation of a business was made in October 2025. It comprised eight questions.
The HMRC reply was comprehensive and detailed. It was well written, clear and answered the majority of my questions.
For readability reasons each question and answer have been combined and grouped on the following pages:
In some instances the original table format has been modified to suit its display on a web page.
There will be around 6000 deaths between the end of the 2024/5 tax year and when HMRC run their MTD ITSA inclusion routines in spring 2026. This FOI request asked HMRC about a range of scenarios. The HMRC response stated some key principles:
In general, Making Tax Digital (MTD) obligations cease upon death. As currently for a customer within Self Assessment, the personal representative (executor or administrator) is responsible for handling the deceased customer’s tax affairs with the completion of Self Assessment tax returns. MTD does not change this requirement or how the personal representative will be notified of their obligations once a death has been notified. HMRC has added an additional step into the internal process upon notification of death that updates the deceased’s MTD record to cease any remaining MTD obligations.
Regulation 6 [ the need to provide a digital termination date] continues to apply if the deceased had a digital obligation on the date of death (the digital termination date). Notification is required so that future obligations, and accompanying reminders, can be switched off.
If HMRC receives notification of death after the quarterly update deadline, the failure to notify the digital termination date on time may mean a late submission penalty (point or financial penalty) notice, under the new MTD penalty regime, is issued. However, once death is notified and recorded, no further action to enforce the penalty will be taken
I deduce from 1 above that provided that the notification of death has been received by HMRC prior to the MTD ITSA inclusion runs in the spring then no MTD ITSA communication will be sent to the deceased's estate.
The HMRC answer to FOI-2025/162436 raised some questions. A follow-up FOI request was submitted on 26 November 2025 and answered quickly on 3 December:
It confirmed the original answer to question 2B in the FOI-2025/162436
The HMRC response to the question about £1000 turnover referred to existing HMRC web pages. It did not address the central question as whether micro businesses need to be recorded under MTD ITSA if there is also another business with a turnover in excess of £50k. HMRC will; be asked to review its response.
Click the link in the subheading to see the text of the FOI request. Update will be provided as HMRC responses are assessed.
The scope related to what happens if a Tranche 1 business ceases trading in tax year 2025/26 was submitted on 25 November 2025; a response is due around December 24th.
A HMRC answer in the FOI-2025/162436 identified that there was no cessation of business field for foreign property income. ( SA106). A follow-up FOI was sent on 1 December 2025, a reply is expected around December 31st.
Is there any operational process, system rule, or recorded guidance that allows the taxpayer to stop reporting that business through MTD without formally ceasing the business such as when the income falls below £1000? Submitted on 4 December; a reply is expected from HMRC in the second week of January.
It is unclear what income threshold will be used when the three year period spans the £50k, £30k and £20k entry thresholds. Submitted on 4 December; a reply is expected from HMRC in the second week of January.
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