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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.

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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.

Exhibit 1 · Illustrative exampleQualifying income in three cases
£34kConsultant, £34,000 fees£25kLandlord, half of £50,000 rent£32kBoth: £18,000 + £14,000

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.

This insight is general information, not advice for your circumstances. Talk to us before acting on it.

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