MTD qualifying income is the relevant gross self-employment and property income before expenses. Combine the sources and use the correct lookback year. PAYE salary does not count towards this total, and profit after expenses is not the threshold figure.
What counts as qualifying income
HMRC adds up income from:
- self-employment
- property (including, where relevant, more than one source)
That total can come from several trades or properties. It is based on the Self Assessment return HMRC uses to assess the relevant year, not on a rough guess from your bank balance.
What usually does not count
These are generally not part of qualifying income for MTD threshold checks:
- employment income taxed through PAYE
- State Pension and private pensions
- dividends (including from your own company)
- your share of profit as an individual partner in a partnership (with limited exceptions explained on GOV.UK)
You may still need Self Assessment for those incomes. They just do not drive the MTD qualifying-income total in the same way.
How the £50,000 rule fits the timeline
According to current GOV.UK guidance, if your qualifying income is over:
- £50,000 for 2024 to 2025: MTD from 6 April 2026
- £30,000 for 2025 to 2026: MTD from 6 April 2027
- £20,000 for 2026 to 2027: MTD from 6 April 2028
HMRC reviews returns and may write to you. Even without a letter, it is still your responsibility to check whether you need to use MTD.
Example
Jordan has £27,000 rental turnover and £26,000 self-employment turnover in the same tax year. Qualifying income is £53,000 before expenses. That is over £50,000, so the April 2026 MTD start can apply even though neither figure alone looks “huge.”
Common mistake
Using profit after expenses, or adding PAYE salary into the total, then deciding you are “safely under £50,000.” Threshold checks are based on HMRC’s qualifying-income rules. Read the official GOV.UK page rather than social media shortcuts.
What to do next
- Work out your self-employment and property totals using GOV.UK’s qualifying-income guidance.
- Use HMRC’s checker and TaxSimba’s MTD checker as a practical prompt, then confirm against official rules.
- If you are in scope (or already signed up), plan digital records and quarterly updates.
- Decide whether you want accountant-led support via the Making Tax Digital service.
Check the year before adding the income
Illustrative preparation example.
Your latest trade receipts are £22,000, but the HMRC notice uses an earlier return. Put each year’s trade and property income on a separate line before comparing a threshold. Mixing this year’s trade receipts with last year’s rent creates a total that belongs to neither year.
Check: Which completed return and income sources support the start date in your notice?
| Check | Practical action |
|---|---|
| Sole-trade turnover | Use the relevant gross business income before expenses. |
| Property income | Include the relevant property income and ownership share. |
| Assessment year | Match the total to the correct phase and official threshold. |
Does a low profit put me outside MTD?
Not by itself: turnover and profit are different figures. Check the qualifying-income calculation before relying on expenses.
Should I use the latest bank balance?
No. Use records for the tax year HMRC assesses, distinguishing income from transfers and other receipts.
Download a checklist for this guide
- Assessment tax year
- Gross income from each sole trade
- Property income and ownership shares
- PAYE and other excluded income kept separate
- Start date, exemption questions and HMRC correspondence