Self-employed CIS subcontractors can generally deduct allowable business expenses when calculating taxable profit.

An expense must be incurred wholly and exclusively for business purposes. Where something is used for both work and personal reasons, you can normally only claim the business share.

Common expenses may include the following.

Making Tax Digital for Income Tax applies to sole traders and landlords based on their qualifying income.

The rules are being introduced in stages:

● from 6 April 2026: qualifying income over £50,000

● from 6 April 2027: qualifying income over £30,000

● from 6 April 2028: qualifying income over £20,000

A quarterly update is a summary of the income and expenses recorded for your self-employment business during the tax year.

It is not a complete CIS tax return and it does not settle your final tax position.

MTD 4 Subbies uses the digital records you have kept to prepare the figures for HMRC.

Accurate records make your quarterly updates and year-end tax return much easier to complete.

You should keep digital records of your income and expenses, along with evidence of the CIS deductions made by each contractor.

Under the Construction Industry Scheme, contractors may deduct tax from payments made to self-employed subcontractors.

The standard deduction rates are:

● 20% if you are registered for CIS

● 30% if you are not registered or cannot be verified

● 0% if HMRC has approved you for gross payment status

These deductions are advance payments towards your final tax liability. They are not an extra fee charged for working under CIS.

“CIS tax return” is an informal term often used to describe the Self Assessment tax return completed by a self-employed subcontractor working under the Construction Industry Scheme (CIS).

It is different from the monthly CIS returns submitted by contractors.

Contractors use monthly CIS returns to tell HMRC:

● which subcontractors they have paid

● the gross amounts paid

● how much CIS tax they deducted

● whether any payments were made without deductions

As a subcontractor, you do not normally submit those monthly contractor returns.

If you work as a self-employed CIS subcontractor, Making Tax Digital change show you report your income and expenses during the tax year.

Instead of only bringing your figures together for one annual Self Assessment tax return, you’ll keep digital records and send quarterly updates to HMRC using compatible software, like MTD 4 Subbies.

The upcoming MTD for Income Tax rules require much more than just a submission—they mandate digital record-keeping for all your income and expenses throughout the year. Bridging software is a basic tool that only connects spreadsheet totals to HMRC, making it a short-term fix. MTD 4 Subbies is built to handle the entire process seamlessly, offering better value by automating tasks like receipt capture and bank reconciliation.

Yes, for sole traders and landlords who reach the turnover threshold. Instead of one annual tax return, you’ll submit four quarterly updates and one final declaration using your HMRC-recognised software. It’s the same information, just spread out through the year.

Under Making Tax Digital, your biggest priority is shifting your tax process from annual paperwork to ongoing, digital habits. Here’s a simple action plan for sole traders, especially those under CIS to get you MTD-ready with MTD 4 Subbies today.

We understand that adopting new digital habits requires an initial investment of time. However, this shift to MTD is your opportunity to upgrade your financial management and unlock something far more valuable than compliance:

You will need to follow MTD for Income Tax rules if you are an individual registered for Self Assessment and get income from self-employment or property, or both.

Making Tax Digital (MTD) for Income Tax is a UK government initiative that’s changing how sole traders and landlords report their income tax. Instead of doing one big Self Assessment tax return each year, you’ll:

We're here to make Making Tax Digital simpler for subcontractors across the UK.

No unnecessary jargon. No overly complicated systems. Just straightforward tools designed around the way real tradespeople work.

You’ll need to use Making Tax Digital for Income Tax if all of the following apply:

Making Tax Digital (MTD) for Income Tax is one of the biggest changes to the UK tax system for self-employed workers and landlords in recent years. If you're a CIS subcontractor, sole trader it's important to understand when the new rules will apply to you, whether you're exempt, and what steps you should take to prepare.

For many CIS subcontractors, paperwork is often left until the end of the tax year. Receipts go missing, invoices are forgotten and bank statements become the only record of what happened. While this approach may have worked in the past, Making Tax Digital (MTD) is changing how self-employed workers keep their records and report their income to HMRC.