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Is the MTD threshold based on turnover or profit?
Last verified 23 October 2026
Turnover. The threshold uses your qualifying income, which is your total self-employment and property income before expenses. A landlord with £35,000 of rent and £20,000 of costs has qualifying income of £35,000, not £15,000.
You add together all your self-employment and property sources. For jointly owned property, you count only your share of the income. If you only learn your share after expenses, that net figure is used. If you are UK tax resident, foreign property income counts too.
Employment income taxed through PAYE, your share of partnership profit, dividends, and State and private pensions do not count. HMRC checks qualifying income against your Self Assessment return for an earlier tax year.
The thresholds are over £50,000 from 6 April 2026, over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028. If your qualifying income is £20,000 or less, you are exempt.
Read next
Sources
- GOV.UK: Work out your qualifying income for Making Tax Digital for Income Tax
- GOV.UK: Find out if and when you need to use Making Tax Digital for Income Tax