Checked against HMRC’s qualifying income guidance on 11 November 2026.
Whether Making Tax Digital applies to you comes down to one number: your qualifying income. Get it wrong and you’ll either panic for no reason or miss a legal deadline. The good news is that it’s simple once you know what HMRC counts and what it ignores.
On this page
Is it turnover or profit? Turnover.
Qualifying income is your gross income from self-employment and property added together, before any expenses are taken off. If you’re a sole trader, that’s your turnover (everything you invoiced or took). If you’re a landlord, it’s the rent you received. Your profit doesn’t matter for this test.
HMRC compares that figure with the threshold for the relevant tax year:
- over £50,000 in 2024 to 2025: MTD from 6 April 2026
- over £30,000 in 2025 to 2026: MTD from 6 April 2027
- over £20,000 in 2026 to 2027: MTD from 6 April 2028
“Over” means strictly more than. Exactly £30,000 is not over £30,000.
What counts and what doesn’t
| Counts towards qualifying income | Doesn’t count |
|---|---|
| Sole trader turnover, before expenses | Wages or salary from a PAYE job |
| Rental income, before expenses | Pensions |
| Your share of rent from a jointly owned property | Dividends and savings interest |
| CIS income before the contractor’s deduction | Profit from a partnership |
It’s assessed per person, not per household and not per property. Two people who co-own a rental can end up with different MTD start dates if one of them also runs a business.
Five worked examples
These are made-up people with typical setups. All figures are for the 2025 to 2026 tax year (6 April 2025 to 5 April 2026), which decides the April 2027 start.
1. Sam, electrician: profit under £30,000, still in
Sam invoiced £34,000. After materials, van costs and insurance of £15,000, his profit was £19,000.
Qualifying income: £34,000. That’s over £30,000, so Sam uses MTD from 6 April 2027. His low profit doesn’t change this, because the test is on takings.
2. Priya, CIS subcontractor: bank says £28,800, HMRC says £36,000
Priya is a self-employed bricklayer working under the Construction Industry Scheme. She invoiced £36,000 for labour. Her contractors deducted 20% CIS tax (£7,200), so £28,800 reached her bank account.
Qualifying income: £36,000. The CIS deduction is tax paid on her behalf, not a reduction in her income. She’s in from April 2027 even though her bank statements show less than £30,000. This catches a lot of subcontractors out. More on this in MTD for CIS subcontractors.
3. Dan and Jo, joint landlords: £44,000 of rent, neither is in yet
Dan and Jo are married and jointly own two flats that brought in £44,000 of rent. They split the income 50/50 and neither has any other self-employment or property income.
Qualifying income: £22,000 each. Neither is over £30,000, so neither needs MTD from April 2027. But if rents stay at this level in 2026 to 2027, each will be over £20,000 and will need MTD from April 2028.
4. Chris, PAYE job plus side income: salary is ignored
Chris earns a £42,000 salary through PAYE. He also runs a weekend gardening business that took £9,000, and rents out a flat for £14,000 a year.
Qualifying income: £23,000 (£9,000 plus £14,000). His salary doesn’t count. He’s not in from April 2027, but is likely to be from April 2028 if his figures stay similar.
5. Amira, started trading halfway through the year
Amira started a cleaning business on 6 October 2025 and took £17,000 by 5 April 2026, six months of trading.
HMRC says that where a sole trader’s accounting period is shorter or longer than 12 months, it will annualise the figure if it has the information, meaning it works out what the income would be over a full year. Six months at £17,000 is roughly £34,000 a year, which would be over £30,000. If you started trading part way through a year, check this carefully rather than assuming the actual figure is what counts. Landlords with a short or long period need to annualise their property income themselves.
Edge cases worth knowing
Your share of joint property after an agent’s costs
If you jointly own a property and only receive notice of your share of the income after expenses have been deducted, HMRC says it will use that figure as your qualifying income.
Your business has stopped
If all of your self-employment and property income sources have stopped since you sent your last tax return, you won’t need to use MTD. HMRC asks you to tell them.
You amend an old return
If you amend a return after the start of the relevant tax year and that pushes your income over the threshold, HMRC says it won’t use the amendment to bring you into MTD for that year.
Your income drops after you’ve joined
Once you’re in, a single quiet year doesn’t take you out. You can opt out only when your qualifying income has been below the threshold for three tax years in a row while you’re using MTD.
Overseas income or non-UK residence
The rules are different if you have overseas property, are non-UK resident or expect to become non-resident. Budget 2026 confirmed that people who expect to become non-resident will be exempt for now. Check HMRC’s guidance for your situation rather than relying on a general rule.
Common questions
Do I use my turnover including VAT?
Use the turnover figure that goes on your Self Assessment return. If you’re VAT-registered and unsure how your accounts treat VAT, ask whoever prepares your return. This is one to confirm rather than guess when you’re close to the line.
Does the £1,000 trading allowance reduce my qualifying income?
Qualifying income is gross income before expenses or allowances. If your figure is close to a threshold, check HMRC’s guidance or ask an adviser rather than deducting anything yourself.
Can I check my figure online?
Yes. HMRC has an official checker, and my free MTD start-date checker adds your self-employment and property figures together and compares them with each threshold. Neither replaces HMRC’s decision, which comes from your tax return.
My partner and I are both landlords. Do we sign up together?
No. MTD applies to each person individually, based on their own share of income.
Check your number in 30 seconds
Enter your self-employment and property income and see which threshold you’re over, if any. Nothing is uploaded. It runs in your browser.
Sources: HMRC, Work out your qualifying income for Making Tax Digital for Income Tax; Find out if and when you need to use Making Tax Digital for Income Tax; If your circumstances change. The examples are fictional and simplified. This is general information, not tax advice.