What counts as qualifying income

One number decides whether Making Tax Digital applies to you and from when. It is not the number most people assume.

Turnover, not profit

The word doing the work is before. Everything you spend to earn the money is irrelevant to this test. Stock, materials, mileage, software, mortgage interest, letting agent commission, an accountant's fee — none of it comes off.

This is why the thresholds catch people who do not feel like high earners. A trade business turning over £46,000 with £30,000 of materials and van costs has qualifying income of £46,000, and profit of £16,000. The threshold test sees £46,000.

What counts

• Income from self-employment (sole trader turnover, before expenses)
• Income from property, including UK rental income
• Your share of income from jointly owned property
• UK property income, if you are not a UK tax resident
• Income from a bare trust or an interest in possession trust

What does not count

• Employment income taxed through PAYE
• Your share of profit from a partnership, as an individual partner
• Dividends, including dividends from your own company
• The State Pension
• Private pension income

There are further exclusions for less common situations — some foreign income, income from certain investment funds, qualifying care relief, and one-off UK land transactions among them. The GOV.UK guidance linked below covers these in full.

Adding the two sources together

If you are both self-employed and a landlord, the threshold applies to the combined figure. There is no separate allowance for each. Freelance turnover of £22,000 plus rent of £11,000 is qualifying income of £33,000, which is over the £30,000 threshold.

Finding your figure

1. Open the Self Assessment return for the tax year in the middle column above — that is the return HMRC will check for that start date.
2. On the self-employment pages, take turnover (not net profit).
3. On the property pages, take total property income (not the profit figure).
4. Add them. Ignore salary, dividends, pensions and partnership shares entirely.

If the answer is close to a threshold, that is a good moment to ask an accountant rather than guess — the consequence of being wrong is a set of obligations you did not know you had.

Put your figure into the checker

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Common questions

What is qualifying income for Making Tax Digital?

Your total income from self-employment and property. It is the amount before expenses, also known as turnover.

Is qualifying income before or after expenses?

Before expenses. It is turnover, not profit. Costs such as materials, mortgage interest, letting agent fees and travel do not reduce the figure used to test the threshold.

Does employment income count towards qualifying income?

No. Employment income taxed through PAYE does not count towards qualifying income for Making Tax Digital for Income Tax.

Do dividends count towards qualifying income?

No. Dividends do not count, including dividends from your own company.

Does pension income count?

No. Neither the State Pension nor private pension income counts towards qualifying income.

Does my share of partnership profit count?

No. Your share of profit from a partnership as an individual partner does not count towards your qualifying income, and partnerships do not currently need to use Making Tax Digital for Income Tax.

How do I find my qualifying income?

Take the turnover figure from the self-employment pages of your Self Assessment return and the total property income figure from the property pages, both before expenses, and add them together.

Where this comes from

Everything on this page traces to GOV.UK. Last checked 2026-08-11. If GOV.UK says something different, GOV.UK is right and we are wrong — please tell us.

• Work out your qualifying income for Making Tax Digital for Income Tax
• Find out if and when you need to use Making Tax Digital for Income Tax
• Check if you need to use Making Tax Digital for Income Tax

Checked against GOV.UK on 2026-08-11. See every source we used.