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What is Qualifying income?

Qualifying income is the figure HMRC uses to decide whether Making Tax Digital applies to you. It is your gross income from self-employment and property added together, before any expenses are taken off.

Why it matters to landlords

Employment income, pensions, dividends and savings interest do not count. For jointly owned property only your share of the rent counts. HMRC looks at the tax return for an earlier year: whether you joined in April 2026 depended on your 2024 to 2025 return.

Because it is measured before expenses, a landlord with high mortgage costs and modest profit can still be over the threshold.

Example

Sam earns £45,000 salary, has £22,000 of rent and £12,000 from freelance design. His qualifying income is £34,000, so he is brought in from April 2027, when the threshold drops to £30,000.

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