What counts as qualifying income for MTD
Qualifying income is your gross turnover from self-employment and rental property, before expenses, added together across every business and property you have. It excludes PAYE wages, dividends, savings interest, capital gains and, for now, partnership shares.
Gross, not net, and combined
HMRC tests your turnover and rents before expenses, not your profit. If you run more than one self-employment or own more than one property, every source is added into a single total first, then compared against the threshold for your assessed year, currently £50,000 for the year that set Wave 1.
What doesn't count
PAYE employment income, dividends, savings interest and capital gains are all excluded. Partnership shares are excluded for now too. A salaried job alongside a small side business won't tip you into MTD because of the salary. Only the side business's own gross income counts toward the test.
Jointly owned property
Only your own share of a jointly owned property's income counts towards your qualifying income, not the full rent. HMRC has specific treatment for some joint-ownership situations, so check the current GOV.UK guidance for your exact arrangement rather than assume.
Common questions
Is it gross or net income?
Gross. The test looks at your turnover and rents before you deduct any expenses, not your profit.
Do I add my self-employment and rental income together?
Yes. Every self-employment and property source you have is combined into one total, then tested against the threshold for your assessed year.
What's excluded from the test?
PAYE employment income, dividends, savings interest, capital gains and, for now, partnership shares. None of these count towards qualifying income.
I jointly own a rental property, what counts?
Your own share of the property income counts, not the full amount. If you are unsure how HMRC treats your specific arrangement, check the current GOV.UK guidance before relying on an estimate.