You must use Making Tax Digital for Income Tax if your qualifying income — your combined gross income from self-employment and property, before any expenses — is over £50,000 from 6 April 2026, over £30,000 from 6 April 2027, or over £20,000 from 6 April 2028. HMRC tests the figure on your Self Assessment return two years earlier, and PAYE salary, dividends and pensions don't count.
- Qualifying income is gross turnover, not profit — expenses and mileage don't reduce it.
- Thresholds: over £50,000 → in from 6 April 2026 (tested on your 2024-25 return); over £30,000 → 6 April 2027; over £20,000 → 6 April 2028.
- Self-employment and property income are added together for the test.
- Excluded: PAYE employment, dividends, partnership shares, State and private pensions.
- In scope means digital records + four cumulative quarterly updates a year — the first-ever deadline is 7 August 2026.
What counts as qualifying income?
Qualifying income is your total gross income in a tax year from self-employment and property combined — gov.uk defines it as income "before you deduct expenses, also called your turnover". That makes the MTD test fundamentally different from your tax bill: tax is charged on profit, but MTD scope is decided on turnover.
| Counts towards qualifying income | Does NOT count |
|---|---|
| Self-employment turnover (all trades added together) | Employment (PAYE) salary |
| UK property income (gross rents) | Dividends |
| Foreign property income (if UK resident) | Your share of partnership profits |
| Your share of jointly owned property income | State Pension and private pensions |
Why gig and delivery workers get caught out
Because the test is on gross earnings, a worker on thin margins can be pulled into MTD while making a modest profit. An Uber driver with £52,000 of fares, £13,000 of Uber fees and £8,000 of mileage has a profit around £31,000 — but a qualifying income of £52,000, which is over the £50,000 threshold. The same stacking trap applies if you combine a side business with a rental property: £30,000 of turnover plus £25,000 of rents is £55,000 of qualifying income, even though neither alone crosses the line.
What happens if I'm in scope?
From your start date you must keep digital records in MTD-compatible software and send HMRC a quarterly update for each income source. Updates are cumulative — each covers from the start of the tax year — and due by 7 August, 7 November, 7 February and 7 May. See your exact dates and export them to your calendar with the quarterly deadline calculator. You may be exempt in limited cases — for example if you're digitally excluded — see gov.uk's exemption guidance.
Frequently asked questions
Is qualifying income based on profit or turnover?
Turnover. Qualifying income is your gross income from self-employment and property before any expenses are deducted. Your profit decides how much tax you pay — but your turnover decides whether you're in Making Tax Digital.
Does my PAYE salary count towards the £50,000?
No. Employment income, dividends, pensions and partnership shares are all excluded. Only self-employment and property income count towards qualifying income.
Which year's income does HMRC look at?
The return filed two years before each start date: the April 2026 wave is tested on your 2024-25 Self Assessment return, the April 2027 wave on 2025-26, and the April 2028 wave on 2026-27.
I have two businesses — are they added together?
Yes. All your self-employment sources and property income are combined into one qualifying income figure. £30,000 from delivery driving plus £25,000 of rent is £55,000 — over the April 2026 threshold.
Does MTD change how much tax I pay?
No. MTD changes how you keep records and report (digital records, quarterly updates) — the tax itself is still calculated the same way. Use the sole trader calculator to estimate the bill.
Sources: Check if you need to use MTD for Income Tax and Work out your qualifying income (gov.uk), verified 12 June 2026. Guidance for information only — not regulated tax advice.