SALF1450 | Self Assessment: the legal framework: Making Tax Digital: Exemptions: Determination of qualifying income

A person’s qualifying income is either:

• The total gross amount from all relevant activities included in the return before any deductions

• If there is no requirement for the gross amount, the net amount included in the return after deductions

The following should not be included:

• Amounts received by a trustee, in that capacity

• Payments or transfers related to visiting performers (ITTOIA 2005, s.13)

• Qualifying care receipts (ITTOIA 2005, Chapter 2 of Part 7)

No account will be taken of any amendment to the return which increases the person’s qualifying income for the year if the amendment is made after the start of the tax year to which digital obligations would otherwise apply.

If the qualifying income for a tax year is for a period longer or shorter than 12 months, it should be adjusted proportionately based on the length of the period. If it appears that that method would work unreasonably or unjustly, it should be adjusted on a just reasonable basis.

If the tax year has ended and the person has not yet been given a notice to file to make and deliver a return for that year, then the qualifying income is dependent on whether that person was required to give HMRC quarterly updates. If they were required to give HMRC quarterly updates, then the qualifying income is the gross amount of income from each business required to be included on the latest update. In any other case the qualifying amount is zero.