Qualifying income is the figure HMRC uses to decide whether a person must use Making Tax Digital for Income Tax. It is their total gross income from self-employment and property in a tax year, before any expenses are deducted.
What counts
Qualifying income adds together your turnover from every sole trader business and your gross rents from UK and overseas property. It is income, not profit: expenses are ignored. For jointly owned property, only your share counts.
It does not include employment income, pensions, dividends, savings interest or your share of a partnership’s profits.
Which year HMRC looks at
HMRC takes the figure from a tax return you have already filed.
| Qualifying income in this tax year | Over | You join from |
|---|---|---|
| 2024 to 2025 | £50,000 | 6 April 2026 |
| 2025 to 2026 | £30,000 | 6 April 2027 |
| 2026 to 2027 | £20,000 | 6 April 2028 |
HMRC writes to you to confirm that you need to join.
Heads up — because it is gross income, a landlord or trader with high turnover but little profit can still be brought in.
Read more: Making Tax Digital (MTD) and Making Tax Digital for Income Tax in Tax Optimiser.