MTD qualifying income: is the threshold turnover or profit?

Add the income sources, not the profits

The example combines two full-year sources. Business expenses do not reduce this general threshold figure. PAYE wages, pensions and dividends are excluded from qualifying income, although they may still belong on the annual return. See salary plus side-income guidance.

Basis: Work out your qualifying income · Choose the right software

Match the threshold to its tax year

More than £50,000 in 2024 to 2025 points to 6 April 2026; more than £30,000 in 2025 to 2026 to 6 April 2027; more than £20,000 in 2026 to 2027 to 6 April 2028. “More than” matters: exactly £30,000 does not exceed £30,000.

Check all relevant years and exemptions in the eligibility checker. Falling below a later threshold does not by itself cancel an existing obligation; see when you can stop using MTD.

Basis: Find out if and when you need MTD · If your circumstances change

When the simple addition needs more care

Part-year figures may need annualising. Joint-property notification after expenses, cash-basis VAT treatment, ceased sources and tax residence have specific rules. Use HMRC’s qualifying-income guidance rather than assuming every bank receipt counts.

Basis: Work out your qualifying income

Not a VAT registration test

This calculation checks entry into MTD for Income Tax. If you also use VAT software, ask whether it supports Income Tax, every relevant income source and the annual return. Do not assume your existing VAT submission arrangement covers these tasks.

Basis: Choose the right software

From threshold to preparation

Once your start year is clear, use the preparation checklist to organise records, software and responsibilities. The threshold is an entry test; it does not calculate the tax you owe.

Basis: Using MTD for the first time