Quick answer:
Qualifying income for MTD is your gross income (before expenses) from self-employment and property, added together. If that combined total is over £50,000 for the 2024/25 tax year, you must use MTD for Income Tax from 6 April 2026. For the full picture of the rules, start with our complete 2026 MTD guide.
Why “qualifying income” matters
Whether you’re pulled into Making Tax Digital depends on a single figure: your qualifying income. Get it wrong and you might either prepare unnecessarily or, worse, miss a mandatory start date. The key thing to remember is that it’s based on gross income ,your turnover, not your profit. Once you know your figure, run it through our am I affected by MTD check.
What counts and what doesn’t
- Counts: gross self-employment income (sole trader turnover) and gross property/rental income.
- Doesn’t count towards the threshold: employment (PAYE) income, dividends, savings interest, and most other non-trading income.
You add your self-employment and property gross figures together ,you don’t test them separately.
Worked examples
Example 1 ,sole trader only: Priya is a freelance designer with £56,000 turnover and £18,000 of expenses. Her qualifying income is £56,000 (gross, not the £38,000 profit), so she’s in scope from April 2026.
Example 2 ,landlord only: Marcus receives £42,000 in rent across two properties. That’s below £50,000, so he isn’t in the first phase ,but he will be caught when the threshold drops to £30,000 in April 2027.
Example 3 ,sole trader and landlord: Sam earns £35,000 from a trade and £20,000 from rent. Individually each is under £50,000, but combined they total £55,000 ,so Sam is in scope from April 2026 and files separate updates for each business.
The phased thresholds
- April 2026: qualifying income over £50,000.
- April 2027: over £30,000.
- April 2028: over £20,000.
HMRC defines qualifying income within its eligibility guidance on GOV.UK, that can further help you figure out where you stand.
How CleanBooksAI helps you stay ahead
CleanBooksAI tracks your income in real time, so you always know where you stand against the thresholds ,useful if you’re close to a band and want to prepare early rather than scramble later.
