Making Tax Digital · Heat pump installers
Making Tax Digital for heat pump installers: 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 heat pump installers
A self-employed heat pump installer is over £30,000 of turnover on three installs, because the unit, the cylinder and the emitters are in the price. Over £30,000 for 2025 to 2026 means Making Tax Digital from 6 April 2027, and a grant paid to you towards a job is money received for that job.
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 heat pump installers' numbers
A heat pump installer took £118,000 in 2025 to 2026 on nine installs for homeowners, grant money included, no CIS. £74,000 went on heat pumps, cylinders, radiators, pipework and a subbie. HMRC's figure is £118,000, and over £50,000 in 2024 to 2025 meant a 6 April 2026 start.
- Invoiced, before expenses
- £118,000
- Materials, costs, subbies
- £74,000
- HMRC's figure
- £118,000
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 heat pump installers
Installing a heating system is on GOV.UK's construction list, so a housebuilder or a contractor paying you to fit heat pumps on a site deducts 20% from the labour. Homeowners paying you, grant or no grant, don't. The whole installed price is your Making Tax Digital turnover.
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 heat pump installers lose
- The grant paid to you for a customer's install, money received for that job on a different day from the customer's balance.
- The plumber or sparky you pay on each job, which makes you their contractor under CIS.
- MCS, the design software and the heat loss survey time, paid for once and spread across every 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 heat pump installers ask
The grant comes to me, not the customer. Is it my turnover?
A grant paid to you towards a job is money received for that job, so record it with the customer's payment, the day it arrives. Your accountant confirms how it's treated at year end.
A customer paid a £3,000 deposit in March and the balance in May. Two tax years?
Record each on the day it arrives, with its date. The quarterly update needs totals for the year so far, and your accountant or GOV.UK tells you which year a payment that straddles 6 April belongs to.
I was over £50,000 in 2024 to 2025. Am I late?
GOV.UK says over £50,000 for 2024 to 2025 should have started on 6 April 2026. Set up now, bring the year's records in, and ask your accountant about the updates already missed.
Is MTD for Income Tax the same as the VAT one I already do?
No. MTD for VAT is for VAT-registered businesses and already runs. Making Tax Digital for Income Tax is for sole traders and landlords over the threshold: digital records, quarterly updates of category totals, and the return through software. A VAT-registered heat pump installer over £30,000 is in both.
What goes in a quarterly update, the grants too?
Totals for each income and expense category for the year so far, which includes money received towards jobs. GOV.UK says HMRC doesn't get the individual records. How a grant is treated at year end is your accountant's call; the update just needs the totals.
Do I still need to send a tax return?
Yes. GOV.UK keeps the return, sent through your MTD software by 31 January after the tax year; the quarterly updates feed it but don't replace it, and the return is where the year's profit and tax are finalised.
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)
