How to calculate qualifying income for Making Tax Digital for Income Tax

**What qualifying income is** Qualifying income is total income from self-employment and property before expenses (also known as turnover). HMRC bases this on the tax return submitted in the previous tax year. **What counts towards qualifying income:** - Self-employment income - UK and foreign property income (for UK tax residents) - UK property income only (for non-UK tax residents) - Income from ceased businesses (if other self-employment or property income continues) - Your share of jointly owned property income **What doesn't count:** - Employment income (PAYE) - Partnership profits as an individual partner - Dividends (including from your own company) - Pensions - Income from UK Real Estate Investment Trusts (REITs) **Example calculation:** £25,000 rental income + £27,000 self-employment income = £52,000 qualifying income. If qualifying income exceeds the relevant threshold, Making Tax Digital for Income Tax becomes mandatory. Read the full guidance on GOV.UK for detailed rules on ceased income sources, accounting periods, and tax residence effects.