Making Tax Digital · Builders
Making Tax Digital for builders: do you need it?
170 days until it starts for sole traders over £30,000
Checked against GOV.UK, 14 October 2026.
The short answer for builders
A self-employed builder with a couple of regular subbies clears £30,000 of turnover on one extension, so almost every builder is in from 6 April 2027. The catch is the word turnover: it's the whole job value you invoiced, materials and subbies included, not what was left for you.
The thresholds, from GOV.UK (26 March 2026): over £50,000 for 2024 to 2025 started on 6 April 2026, over £30,000 for 2025 to 2026 starts on 6 April 2027, over £20,000 for 2026 to 2027 starts on 6 April 2028. All counted as turnover, before expenses.
The figure HMRC checks
HMRC checks your qualifying income: everything that came in from self-employment and property, before expenses. GOV.UK calls it turnover. Wages from a PAYE job don't count.
The figure is what you invoiced, not what landed in the bank. GOV.UK says the deductions a contractor takes count as advance payments towards your tax and National Insurance bill, and qualifying income is counted before expenses, so the 20% that came off is still part of your turnover.
A worked year, in builders' numbers
A builder invoiced £148,000 in the 2025 to 2026 tax year: two extensions, a loft and a run of smaller jobs. £96,000 of that went on materials, skips, plant and subbies, and one developer job had £6,200 of CIS taken off. HMRC's figure is the £148,000, so Making Tax Digital from 6 April 2027 at the latest.
- Invoiced, before expenses
- £148,000
- Materials, costs, subbies
- £96,000
- CIS taken off by contractors
- £6,200
- What reached the bank
- £141,800
- HMRC's figure
- £148,000
Making Tax Digital from 6 April 2027 at the latest
Over £30,000 in 2025 to 2026 means 6 April 2027. If it was over £50,000 in 2024 to 2025 as well, it should have started on 6 April 2026.
Need it? Sort it in two minutes.
InstaQuote, 7 days free, then from £47 a month only if you carry on. ANNA opens from inside it, free for your first year. About 2 minutes.
- InstaQuote does the quotes, the invoices and the chasing.
- ANNA is the MTD software your updates go to HMRC through, free for your first year.
- You do the job.
- Not sure where to start? Reply to your welcome email and I'll set it up with you.
- ANNA gives you a personal tax calendar with reminders, so no quarter slips past.
- Prefer your accountant? They can still do it, and your records are ready for them.
I'm Tom, the founder. Ten years in the trade, every quote done in the van. If it's not quicker than what you do now, bin it and tell me why.
AdInstaQuote: 7 days free, then from £47 a month only if you carry on. ANNA: £0 monthly fee to start, MTD for Self Assessment free for the first year, and a personal tax calendar with reminders (anna.money, 14 October 2026). InstaQuote may be paid by ANNA if you open an account through us. ANNA's terms apply.
CIS and builders
You're usually on both sides of CIS. A developer or a main contractor paying you deducts 20% from the labour part of your invoices, and when you pay your own subbies you're the contractor, so you deduct and report for them. Neither side changes the Making Tax Digital figure: your turnover is every invoice you raised, before anyone took anything off it.
The rate, from GOV.UK: 20% if you're registered for CIS, 30% if you're not, nothing if you have gross payment status. Whoever deducts must give you a statement, and that statement is your proof.
The records builders lose
- Subbie payments: what you paid each one, the CIS you deducted, and the monthly return that proves it.
- Merchant account statements, where one line covers four jobs and the VAT needs splitting out.
- Plant hire, skips and muck away paid on the card and never written against the job.
Every three months your software sends HMRC totals for each income and expense category, not the receipts themselves. The updates are due on 7 August, 7 November, 7 February and 7 May, and each one covers the tax year so far.
InstaQuote holds those quotes, invoices and expenses as you work, so they can go into your Making Tax Digital software as the digital records. It isn't that software itself. ANNA, our partner, is the software your updates and return go to HMRC through.
Questions builders ask
I pay subbies. Does that make the quarterly update harder?
Not harder, just more lines. The update carries totals for each expense category, so what you paid subbies goes in as a total, and the CIS you deducted from them is reported on your monthly CIS return as it is now. Keep each subbie's invoice as an expense in the app and the total is ready.
Do materials I buy for the customer count towards my £30,000?
Yes. Qualifying income is counted before expenses, so a £40,000 extension counts as £40,000 even if £22,000 of it was bricks, blocks and the roof. A builder is over the threshold on far less work than it sounds.
My firm is a limited company. Does this apply to me?
Making Tax Digital for Income Tax is for sole traders and landlords registered for Self Assessment. A limited company pays Corporation Tax and isn't in it. If you've gone limited, this page is for the subbies you pay who haven't.
I pay a bookkeeper. Can she do the Making Tax Digital side for me?
Yes. GOV.UK says an agent can sign you up and act for you, which covers the updates, as long as you're registered for Self Assessment and sent a return in the last two years. She still needs your records as digital entries with an amount, a date and a category, which is what the app keeps as you invoice and pay subbies.
When's the first quarterly update if I start in April 2027?
The first period runs from 6 April to 5 July 2027 and the update is due by 7 August 2027. It carries totals for each income and expense category for that quarter, not the invoices. Then 7 November, 7 February and 7 May, each covering the year so far.
What if I miss an update because I'm flat out on site?
From the 2027 to 2028 tax year a late quarterly update earns one penalty point, and at four points HMRC charges £200, then £200 for each further late one. A single point expires after 24 months; once you're at four they only clear after 12 months of filing on time and sending anything still outstanding from the last 24 months. The totals are built from what you already record, so the update itself is a few taps.
Does InstaQuote file my Making Tax Digital updates?
No. InstaQuote holds the quotes, invoices and expenses so they can go into your Making Tax Digital software as the digital records; it isn't that software itself. ANNA, our partner, is the software your updates and return go to HMRC through, from the business account you open inside your InstaQuote account.
Checked against GOV.UK
- GOV.UK: Check if you're eligible for Making Tax Digital for Income Tax (updated 26 March 2026)
- GOV.UK: Work out your qualifying income (updated 11 September 2026)
- GOV.UK: Use Making Tax Digital for Income Tax (updated 7 September 2026)
- GOV.UK: Send quarterly updates (updated 7 September 2026)
- GOV.UK: Penalties for Income Tax Self Assessment volunteers (updated 12 March 2026)
- GOV.UK: Penalties for Making Tax Digital for Income Tax (updated 30 March 2026)
- GOV.UK: Sign up for Making Tax Digital for Income Tax (updated 13 October 2026)
- GOV.UK: Create digital records (updated 7 September 2026)
- GOV.UK: Find software that's compatible (updated 13 July 2026)
- GOV.UK: Apply for an exemption (updated 17 August 2026)
- GOV.UK: CIS deductions from your payments (read 14 October 2026)
- GOV.UK: HMRC's Transformation Roadmap (no MTD for Corporation Tax) (updated 21 July 2025)
- GOV.UK: What is the Construction Industry Scheme (what counts as construction work) (read 14 October 2026)
- GOV.UK: What you must do as a CIS subcontractor (deductions) (read 14 October 2026)
- GOV.UK: What you must do as a CIS contractor (statements, monthly returns) (read 14 October 2026)
