Making Tax Digital Is Now In Force

Making Tax Digital (MTD) for Income Tax has now gone live. If you’re a self-employed subcontractor working under the Construction Industry Scheme (CIS) and your income is £50,000 or more, the new rules apply to you now.

If your income is below the current threshold, this is your early warning. The rollout continues over the next two years, and preparing in advance will make the transition far smoother.

If You’re Above the £50,000 Threshold – Action Is Needed Now

From this month, CIS subcontractors earning £50,000+ must:

• Keep digital records of income and expenses
• Use HMRC-compliant software
• Submit quarterly updates
• File a final digital declaration at the end of the tax year

This replaces the traditional single annual Self Assessment return with at least five submissions per year. If you are still relying on spreadsheets, paper records or only reviewing your figures once a year, you need to act quickly. HMRC now requires quarterly digital reporting, and missing deadlines can lead to penalties.

For busy CIS workers it’s easy to underestimate how significant this change is. But compliance is now mandatory for those within the income threshold.

Quarterly Deadlines You Must Know

If you’re affected now, you’ll need to submit updates every quarter, followed by your final declaration at year-end.

The standard quarterly deadlines are: 7 August 2026, 7 November 2026, 7 February 2027 and 7 May 2027.

Missing submissions will result in penalty points, and once the limit is reached, financial penalties apply. Acting quickly to get compliant software and processes in place is essential.

If You’re Not Affected Yet – Your Time Is Coming

MTD is being introduced in stages:

• From April 2027 – individuals earning £30,000+
• From April 2028 – individuals earning £20,000+

Many CIS subcontractors experience fluctuating income depending on contracts and workload. Even if you are below £50,000 this year, you may fall into the next threshold sooner than expected.

Waiting until just before your start date could mean rushed software decisions and unnecessary stress. Preparing early gives you time to move to digital record-keeping gradually and get comfortable with new systems.

Moving to Compliant Software

MTD requires the use of approved accounting software such as FreeAgent (included in our support package) or another compatible platform of your choice. The good news is that such systems can actually provide better visibility over your tax position throughout the year, as long as they are set up correctly.

If you’re above the £50,000 threshold, you must act now. The new rules are already in force. Find out more about our support packages or get in touch on 01923 257257 to speak to a member of our expert team.

If you’re below the threshold at present, use this time wisely. The next phases are approaching quickly, and early preparation will prevent last-minute pressure.