MTD qualifying income explained

Written by the Quidtrail team · Facts last checked 18 October 2026

The short answer: qualifying income is your gross income from self-employment and property added together, the amount before expenses (turnover), taken from the tax return you submitted for the previous tax year. Salary, pensions, dividends and partnership profit shares don't count (GOV.UK).

Gross or net?

Gross. It's turnover before any expenses or allowances. HMRC's 5 October 2026 announcement says turnover includes gross income "before any tax allowances or expenses are deducted" (GOV.UK news). So a landlord with £34,000 rent and £20,000 costs has qualifying income of £34,000, which is over the £30,000 threshold.

The one exception: if you co-own a property and you're only told your share after expenses, HMRC uses that net figure (GOV.UK).

What counts and what doesn't

Source: GOV.UK.

How HMRC works it out

HMRC checks the Self Assessment return for the previous tax year. If you're over the threshold, it writes to you. HMRC also says that even if you don't get a letter, you must check yourself (GOV.UK).

Source: GOV.UK.

Worked examples

1. Landlord and sole trader: £25,000 rent + £27,000 self-employment = £52,000 (HMRC's own example).
2. Joint owner: a property producing £50,000 split equally with a sibling, and no other income, means your qualifying income is £25,000 (HMRC's own example).
3. Employed landlord: £60,000 salary + £22,000 rent = £22,000 qualifying income. The salary doesn't count.
4. Pensioner landlord: £18,000 pension + £31,000 rent = £31,000. The pension doesn't count.

Examples 1 and 2: GOV.UK. Examples 3 and 4 apply the same rules.

Special cases

Short or long accounting periods

For sole traders, HMRC annualises if it has the information. Six months' trading is doubled. Landlords have to annualise themselves (GOV.UK).

Income sources that have stopped

If one source stopped but another continues, the stopped source still counts for that return. If all your self-employment and property income has stopped, tell HMRC before the start of the next tax year. Otherwise you may be signed up based on the information HMRC has (GOV.UK).

Amending your return

A change made before a tax year starts can bring you into MTD or take you out. A change made after the start of a tax year can take you out for that year, but can't bring you in for that year (GOV.UK).

Non-resident landlords

If you weren't UK tax resident, only UK property income and self-employment income declared on your UK return count. Foreign property income doesn't. If your return included the SA109 residence pages, read the exemption guidance (GOV.UK). See MTD and foreign property.

Falling below the threshold later

Once you're in MTD, you can choose to opt out if your qualifying income stays below the threshold for 3 tax years in a row (GOV.UK).

Related: MTD for landlords · MTD for sole traders · Joint property · Exemptions

Last checked against GOV.UK on 18 October 2026. Not tax advice.