Thresholds · qualifying income

What counts as qualifying income for MTD?

Last updated 28 October 2026. Every fact below is checked against the sources listed at the end. General information, not tax advice.

Short answer: Qualifying income is your total turnover from self-employment and property: the amount before expenses, taken from the tax return you submitted for the previous tax year. It can come from more than one source. HMRC says turnover for the threshold includes gross income from self-employment and property before any tax allowances or expenses are deducted.

What's in and what's out

Employment (PAYE) income, your share of partnership profit as an individual partner, dividends, the State Pension and private pensions don't count towards qualifying income. HMRC's own example: £25,000 of rental income plus £27,000 of self-employment income is qualifying income of £52,000.

Part years, changes and opting out

For sole traders, HMRC annualises qualifying income where it has the information: if you've only traded for 6 months in your first tax year, it doubles your income to work out qualifying income. If you amend a tax return before the start of a tax year and it takes qualifying income above or below the threshold, that decides whether you need MTD for the upcoming year. A change after the start of the year that takes you below the threshold means you don't need it for that year; a change that takes you above it isn't considered for that year. Once you've started, if your qualifying income drops below the relevant threshold for 3 tax years in a row, you can choose to opt out.

Which year's return counts

Tax return	Over	MTD 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

Worked example: adding up several platforms

Example figures Made-up figures for a fictional seller, not real data.

Income	Amount
Etsy (gross, less refunds)	£12,450.00
Amazon (gross, less refunds)	£9,830.00
PayPal sales off-platform	£2,140.00
Employment income (PAYE)	not counted
Qualifying income	£24,420.00

£24,420 is under £30,000, so on this return MTD wouldn't start in April 2027, but it's over £20,000, so the same figure on the 2026 to 2027 return would mean MTD from April 2028.

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Questions

Do my platform fees reduce qualifying income?

No. Qualifying income is your total turnover from self-employment and property: the amount before expenses, taken from the tax return you submitted for the previous tax year. It can come from more than one source.

Does my job count?

Employment (PAYE) income, your share of partnership profit as an individual partner, dividends, the State Pension and private pensions don't count towards qualifying income.

Will HMRC tell me?

If HMRC reviews your return and finds your income is above the relevant threshold, it will write to you confirming that you need to use MTD for Income Tax by the start of the next tax year. Even if you don't get a letter, you must still check your qualifying income yourself and sign up if you need to.

Sources

Using Making Tax Digital for Income Tax for the first time (GOV.UK, checked 28 October 2026)
Work out your qualifying income for Making Tax Digital for Income Tax (GOV.UK, checked 28 October 2026)
Sole traders and landlords earning more than £30,000 urged to act now (HMRC, 5 October 2026) (GOV.UK, checked 28 October 2026)

TidyTill is a record-keeping aid only. This page is general information, not tax advice. TidyTill is not HMRC-recognised software and it doesn't submit anything to HMRC: you send quarterly updates and your tax return through HMRC-recognised software. Rules and dates can change, so check GOV.UK or ask an accountant about your own situation.