Checked against GOV.UK on 14 August 2026
Qualifying income is the single number that decides whether you are in Making Tax Digital and when. It is narrower than most people expect, and it is measured before expenses.
This catches people out in both directions. A landlord with a £60,000 salary and £14,000 of rent has qualifying income of £14,000. A part-time trader turning over £52,000 at a slim margin has qualifying income of £52,000 whatever the profit was.
HMRC assesses qualifying income for a tax year by checking the Self Assessment tax return you submitted in the previous tax year. If you are above the relevant threshold, HMRC writes to confirm. HMRC's guidance also says you should check your own qualifying income — the obligation does not depend on receiving a letter.
Income from a self-employment or property source that has ceased since your last return still counts towards qualifying income, if you have another continuing source. If all your self-employment and property sources have ceased, you must tell HMRC before the start of the next tax year — if you do not, you will need to use MTD.
For sole traders, HMRC will annualise qualifying income where it has the information. HMRC's example: six months of trading in your first tax year means the income is doubled to find the annual equivalent.
Add up your own qualifying income →
General information about UK tax rules, not tax advice. Your own circumstances and HMRC's official guidance govern your position. If you are unsure, speak to an accountant or contact HMRC. Tax rules change — if this page is more than a few months old, check the GOV.UK pages linked above. Found an error? Email hello@getaxionlabs.com and we will correct it.