Yes, your rent counts. For Making Tax Digital, HMRC adds your self-employed turnover and your rent together, both before expenses. If you drive for £22,000 a year and rent out a flat for £10,000, that's £32,000. You're over £30,000, so you'll need to use Making Tax Digital for Income Tax from 6 April 2027, even though neither income would get you there on its own.

If you think of the flat as your pension pot rather than a business, that's fair enough. For this test HMRC counts the rent the same way it counts your trade.

What goes into the £30,000

HMRC calls it qualifying income. It's two numbers added together:

  • your turnover from self-employment, before any costs
  • your gross rent, before mortgage interest, the letting agent's cut, repairs or the gas safety certificate

That second line catches people out. Your flat might bring in £10,000 a year and leave you £2,000 after the mortgage. HMRC uses the £10,000.

Some income doesn't go in at all: wages through PAYE, dividends from your own company, your State Pension or a private pension, and your share of a partnership's profit. So if you do three days on the payroll at a care agency and two days self-employed, only the self-employed part counts.

The line is more than £30,000. Exactly £30,000 isn't over it.

What if I own the flat with my husband or wife?

Then only your share goes into your sum. When a married couple or civil partners own a property together, HMRC normally splits the rent 50:50. You can only use a different split if you really own it in different shares, and you both sign a Form 17 declaration and send it to HMRC.

Same driver, same flat, but owned jointly. Your half of the rent is £5,000. £22,000 plus £5,000 is £27,000, which is under £30,000, so you're not in for April 2027. Your husband or wife does their own sum, with their £5,000 and whatever else they earn.

There's a catch, and we'd rather you heard it now. From April 2028 the line drops to £20,000, based on your 2026/27 figures. If your numbers stay the same, £27,000 is over it. So the joint flat buys you one extra year.

Why your 2025/26 tax return decides it

HMRC looks at the tax return you send for 2025/26, the one due by 31 January 2027, and adds up the turnover and rent on it. If they come to more than £30,000, it writes to tell you you're in from 6 April 2027.

Don't wait for the letter. HMRC's own guidance says it's still your job to check, letter or no letter. And if your tax return is the shoebox of receipts you drop off in the last week of January, you'll find out where you stand with about nine weeks to go.

If you're in, what changes

You send quarterly updates from MTD software, one for each business. The driving is one business and the flat is another, so that's two updates every quarter. Each one is just totals of income and expenses for the period. The tax return at the end of the year still happens, through the same software.

For the flat, the rent, the agent's statements and the bills need to be in the software all year. The folder on top of the fridge won't do anymore. For the driving, it's the fuel receipts and the van costs, kept as you go.

If you want us to do the sum with you, send us last year's tax return or your rough 2025/26 figures and we'll tell you which April applies to you. Our Making Tax Digital page has all the dates, and our bookkeeping service is how we keep both sets of records and send the updates for you. Get in touch and Alex or Anca will answer.

Sources: HMRC, Work out your qualifying income for Making Tax Digital for Income Tax, Find out if and when you need to use Making Tax Digital for Income Tax, Use Making Tax Digital for Income Tax: send quarterly updates and Form 17: declaration of beneficial interests in joint property and income. Correct as at October 2026.