HMRC look at your qualifying income in a specific tax year and then tell you when you need to start.

As things stand, the key thresholds HMRC use are:

If your qualifying income is over £50,000 in the 2024 to 2025 tax year, you will need to use MTD for Income Tax from 6 April 2026.
If your qualifying income is over £30,000 in the 2025 to 2026 tax year, you will need to use it from 6 April 2027.
There are plans to reduce the threshold again, including £20,000 in a later phase.

So for most people reading this right now, the practical question is simple. What was your qualifying income on your 2024 to 2025 Self Assessment tax return?

Qualifying income is your gross income from:

Self employment income, and
UK and foreign property income.

That’s HMRC’s definition. They look at what you reported on the Self Assessment return for the relevant year.

This matters because it means you can be under the threshold on profit and still be over the threshold on qualifying income.

It also matters because different income sources can add together. You might be a sole trader and also a landlord, and the total is what counts.

This is where people get caught.

HMRC are not asking “did you make more than £50,000 profit?” They are asking “was your gross income from self employment and property over £50,000?”

For most sole traders, gross income is basically your turnover before expenses.

For landlords, it is typically your gross rents before expenses.

If you have big costs, that does not change the qualifying income figure. It changes your profit, but the threshold test is still based on gross income.

Here are the examples I use on calls because they make the rule click quickly.

Example 1: sole trader with high expenses
You invoice £62,000. Your expenses are £30,000. Your profit is £32,000.
You are still likely in scope because your qualifying income is based on the £62,000 turnover.

Example 2: landlord with one property and a big mortgage
Your rents are £52,000. Your allowable costs are high. Your profit might be much lower.
You are still likely in scope because the £52,000 gross rents are what drives the threshold test.

Example 3: you have a small trade and a rental
Self employment income £30,000, property income £25,000.
Individually neither looks huge, but combined that is £55,000 and you are likely in the first wave.

Example 4: employed with a side hustle
Salary £60,000 under PAYE, self employment turnover £12,000.
Your PAYE salary does not count towards qualifying income for this test, so you are not brought in by the salary alone. Your qualifying income is driven by self employment and property.

If you are near the threshold, it’s worth checking properly, not guessing.

People often ask “what about salary, dividends, savings interest?”

The key point is that qualifying income for MTD for Income Tax is focused on self employment and property income.

So employment income under PAYE is not part of the qualifying income test.

Other income streams can still matter for your tax overall, but they are not what brings you into MTD for Income Tax under the threshold rules.

If you want the official HMRC wording, this page explains the eligibility test clearly.

This comes up constantly.

For the April 2026 start, HMRC look at your qualifying income for the 2024 to 2025 tax year. If that return is over £50,000, that’s what drives the start date.

So if you are over the line in 2024 to 2025, you should plan as if you are joining from 6 April 2026, even if you think 2025 to 2026 will be lower.

If you are hovering around the threshold, the practical move is to set up a simple system now so it is not a panic job later.

If you want to check quickly, pull up your 2024 to 2025 Self Assessment return and look for:

Your self employment turnover, and
Your property income figures.

If you have more than one trade or more than one property, you want the combined total that HMRC use for the qualifying income test.

If you are unsure, this is exactly the kind of thing we can confirm quickly for you without making it complicated: Making Tax Digital support.

If you are in scope, you will need compatible software to keep digital records and submit quarterly updates.

HMRC keep a list of software that is compatible with Making Tax Digital for Income Tax. It is worth looking at before you buy anything, because plenty of people end up paying for features they will never use.

If you want this handled properly, we can recommend a setup that suits how you work, get it connected, and keep you on track.

If you want to handle this calmly, here is the sensible order.

First, work out whether your 2024 to 2025 qualifying income is over £50,000.
Second, decide whether you want to run it yourself with the right setup, or whether you want an accountant to own the process and remove the mental load.
Third, get it set up early enough that the first quarterly update is not your first time logging in.

If you want us to confirm your position and map out a clean setup, get in touch here: Making Tax Digital support.

Is the £50,000 based on turnover or profit?
It is based on gross income from self employment and property, not profit. For most sole traders that looks like turnover before expenses. For landlords it is typically gross rents.

Does my PAYE salary count towards the £50,000 test?
No. The qualifying income test is based on self employment and property income, not employment income under PAYE.

If I have both self employment and rental income, do they add together?
Yes. HMRC look at your qualifying income across self employment and property income, including foreign property income if you report it on your UK return.

What if I’m just under £50,000?
Then you may not be mandated from April 2026, but it is worth checking the calculation properly. Also keep an eye on the later thresholds and the tax years they apply to.

How do I check the official HMRC position?
Use HMRC’s eligibility page here.

If you are a landlord or sole trader and you think you might be affected, we can confirm whether you are in scope and build a simple plan so this does not become a headache.

Use our MTD page to get in touch: Making Tax Digital support.