Short answer: it depends entirely on which tax year that £40,000 relates to — the threshold that applies to you changes every year of the rollout.
Checking £40,000 against each phase
| Tax year | Threshold | £40,000 income | Result |
|---|---|---|---|
| 2024–25 | £50,000 | Below | Not required from April 2026 |
| 2025–26 | £30,000 | Above | Required from April 2027 |
| 2026–27 | £20,000 | Above | Required from April 2028 (if not already in) |
In practice: someone with fairly stable income around £40,000 a year won't be caught by the first wave in April 2026, but will be caught by the second threshold drop to £30,000 in April 2027 — based on their 2025–26 tax return.
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Check my status →Why "gross income" catches people out
£40,000 here means gross income from self-employment and/or property — before expenses, not your taxable profit. A tradesperson turning over £40,000 with £12,000 of costs still has £40,000 of qualifying income for this test, even though their taxable profit is £28,000.
What to do if you're close to a threshold
- Check the exact gross figure on your last filed Self Assessment return, not an estimate
- If you have both self-employment and rental income, add them together
- If you're within a few thousand pounds either side, get it confirmed by an accountant rather than guessing
Run your own numbers
£40,000 is just one example — the same logic applies whatever your income is. Use the free checker to see your own result against the correct year's threshold in under a minute.