What is qualifying income?
It is the number HMRC tests you against — and it is not your profit, and not your total income either.
HMRC’s own definition: “Qualifying income is your total income from self-employment and property. This is the amount before expenses (also known as turnover), based on the tax return you submitted in the previous tax year.”
Three things that sentence is doing
- Before expenses. Turnover, not profit. A £60,000 trade netting £25,000 is tested on £60,000.
- Self-employment and property. One combined figure, so £30,000 of trade plus £25,000 of rent is £55,000.
- The return you already submitted. Not what you earn now — income up to two years old decides when you start.
What counts
| Self-employment / sole trade | All the money in, before any costs come out. |
| UK property | All the rent, before any costs come out. |
| Foreign property | Rent from abroad counts, but only while you live in the UK for tax. |
What does not
HMRC’s list is explicit, and it ends with a catch-all: “All other sources of income do not count towards your qualifying income.”
| Employment income (PAYE) | Wages from a job never count, however much you earn. |
| Share of partnership / LLP profits | Your share of a partnership does not count. Partnerships have not been given a start date at all yet. |
| Dividends (including from your own company) | Dividends do not count — including ones you pay yourself out of your own company. |
| Pension income (State or private) | Pensions do not count, state or private. |
| UK REIT or Property Authorised Investment Fund income | Property funds do not count. Only property you own yourself does — easy to get wrong, because the name says property. |
| Savings interest | Interest on savings does not count. |
| Capital gains | Money made from selling something does not count here. |
The thresholds it is tested against
| Return tested | Qualifying income over | You start |
|---|---|---|
| 2024/25 | £50,000 | 06/04/2026 |
| 2025/26 | £30,000 | 06/04/2027 |
| 2026/27 | £20,000 | 06/04/2028 |
Common questions
What is qualifying income?
HMRC defines it as your total income from self-employment and property, before expenses — also known as turnover — taken from the tax return you submitted in the previous tax year. It is not your profit and it is not your total income from all sources.
Is qualifying income before or after expenses?
Before. HMRC uses gross turnover and gross rents. Costs, mortgage interest, materials and allowable expenses are all ignored for this test, even though they reduce the tax you actually pay.
Does qualifying income include my salary?
No. Employment income taxed under PAYE is excluded, as are dividends including from your own company, State and private pensions, savings interest, capital gains, income from REITs or property funds, and your share of partnership profits.
Which tax year does HMRC use?
The most recent return you filed before the start date. Your 2024/25 return decides a 6 April 2026 start, 2025/26 decides 2027, and 2026/27 decides 2028 — so the figure that puts you in scope can be up to two years old.
Do self-employment and property get added together?
Yes, into one combined figure. A £30,000 trade plus £25,000 of rent is £55,000 of qualifying income, which is over the £50,000 threshold even though neither source crosses it alone.
Source: Work out your qualifying income for Making Tax Digital for Income Tax. Work out your own figure, or see every rule and where it came from.
Tax Threshold gives information, not tax advice.