Qualifying income: the number that decides whether MTD applies to you
Not profit, not total income: Making Tax Digital looks at a specific figure. How to work yours out, with the cases that most often catch people out.
Qualifying income is your total income from self-employment and property, before expenses, as shown on the tax return HMRC uses for each year’s test. It is turnover, not profit, which is why a business with thin margins can still be in.
Measured against the £30,000 threshold that applies from April 2027: the first and third are in, the second is not.
Show the data
| Consultant, £34,000 fees | £34,000 |
|---|---|
| Landlord, half of £50,000 rent | £25,000 |
| Both: £18,000 + £14,000 | £32,000 |
What does not count
Wages and salary under PAYE, State and private pensions, and your share of profit as a partner in a partnership are all left out. So are dividends and savings interest, which are not self-employment or property income.
The cases that catch people out
- You sold a rental property but are still self-employed: the rent you received before the sale still counts.
- You stopped all self-employment and property income before 6 April 2026: you are out, but tell HMRC, or it may sign you up.
- You use the cash basis and are VAT-registered: if you include VAT in your income, it counts too.
- You are a beneficiary of a bare trust: the property or trading income you are entitled to counts.
More on
This insight is general information, not advice for your circumstances. Talk to us before acting on it.