What is qualifying income for Making Tax Digital?

Last updated: 13 October 2026

In short: Qualifying income is your gross self-employment turnover plus gross property income, before expenses. If the total on your relevant tax return is over the MTD threshold (£50,000, £30,000 or £20,000 depending on the year), you must join MTD for Income Tax.

What counts and what does not

Counts: self-employment turnover and UK or overseas rental income, both before expenses.

Does not count: PAYE wages, pensions, dividends, savings interest and partnership income.

Worked examples

  • Plumber turning over £42,000 with £15,000 costs: qualifying income £42,000, in scope from April 2027
  • Electrician with £18,000 trade and £8,000 rent: £26,000, in scope from April 2028
  • Employed builder with £10,000 side work: £10,000, not in scope at current thresholds

Why turnover matters, not profit

Many tradespeople are caught out because profit is low but turnover is high once materials are included. Track invoices accurately so you know where you stand.

Frequently asked questions

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