MTD for Architects, Surveyors & Engineers —
Staged Fees, Sub-Consultants and Your Threshold
Use fees before PI insurance, software, travel and sub-consultant costs. Ask your accountant how any true disbursements are treated.
- Sole practitioners are sole traders, so MTD applies once gross fees (plus any rental or other self-employed income) pass the threshold.
- Sub-consultant fees you invoice on to a client as principal are part of your turnover. What you pay the sub-consultant is an expense.
- Practices run as partnerships, LLPs or limited companies are outside MTD for Income Tax at present.
Architects, chartered surveyors and consulting engineers who practise on their own are sole traders in HMRC’s eyes, and the fees you bill sit in the Making Tax Digital threshold whether your profit is high or low. The detail that trips professionals up is fees that pass through you, such as a structural engineer you engage and re-invoice. This guide covers what counts, how staged fees and work in progress affect records, and the costs professionals can claim.
Are Sole-Practitioner Architects, Surveyors and Engineers in MTD?
Yes, if you practise as a sole trader and your gross fees (together with any property or other self-employed income) are over the threshold for the relevant tax year. The first line was £50,000, tested on your 2024–25 return:
| Tax Year Tested | Gross Income Over | MTD Start Date |
|---|---|---|
| 2024–25 | £50,000 | 6 April 2026. Live now |
| 2025–26 | £30,000 | 6 April 2027 |
| 2026–27 | £20,000 | 6 April 2028 |
The threshold is measured on your invoiced fees, not on profit after PI insurance, software and office costs. A practitioner billing £88,000 and spending £30,000 on running the practice is tested on the £88,000. If your practice is an LLP, a partnership or a limited company, it is outside Making Tax Digital for Income Tax. See the partnerships guide and sole trader vs limited company.
What Counts as Professional Fee Income
| Income | Counts towards the threshold? |
|---|---|
| Stage fees: design, planning, technical, site stage | Yes |
| Survey, valuation, party wall and expert witness fees | Yes |
| Retainers, project management and CDM duties | Yes |
| Sub-consultant fees invoiced to the client as principal | Yes |
| Fees for teaching, CPD and writing paid gross | Yes |
| Salary or payslip income from an employed role | No |
| VAT charged on fees | No |
| Rental income from property | Yes, added to the total |
Staged Fees, Work in Progress and Late Payment
Professional fees are billed in stages, often over a project of many months, and clients can be slow to pay. When income lands in a quarter depends on whether you use the cash basis (recorded when paid) or traditional accounting (recorded when invoiced or earned). Many sole practitioners use cash basis because it is simpler, but if you carry large amounts of work in progress it is worth asking your accountant which approach fits.
- Keep a project record: client, stage, fee agreed, invoice date, amount and payment date.
- Record sub-consultant invoices against the same project, so margins are visible.
- Record deposits and fees on account as received, with the stage they relate to.
- Keep proof of site visits and travel with each project.
What Professionals Can Claim
| Expense | Notes |
|---|---|
| Professional indemnity insurance | Usually the largest compulsory cost for a practice |
| RIBA, RICS, ICE or IStructE membership | Annual subscriptions and chartered body fees |
| CAD, BIM and drawing software | AutoCAD, Revit, SketchUp, plugins and cloud storage |
| Sub-consultants and drawing services | Structural, M&E and measured survey fees you pay |
| Planning fees paid for clients | Treatment depends on how they are recharged |
| Site travel | 45p a mile for the first 10,000 miles, then 25p, plus parking and tolls |
| Equipment | Laser measures, drones, laptops and large-format printing |
| Office and CPD | Studio rent or home office, training, accountancy fees |
| Update | Period (standard) | Deadline | 2026–27 |
|---|---|---|---|
| Q1 | 6 Apr – 5 Jul 2026 | 7 Aug 2026 | No points if late |
| Q2 | 6 Jul – 5 Oct 2026 | 7 Nov 2026 | No points if late |
| Q3 | 6 Oct 2026 – 5 Jan 2027 | 7 Feb 2027 | No points if late |
| Q4 | 6 Jan – 5 Apr 2027 | 7 May 2027 | No points if late |
The soft landing means no late-update points until 6 April 2027. After that, one point per missed deadline and a £200 fixed penalty at four points. HMRC has also been signing up eligible customers since September 2026, so get ahead of it and register yourself. See the registration guide and the software comparison.
Worked Example
Helen Marsh, sole-practitioner architect
Helen pays the engineer £9,800 and has PI insurance and software costs, which lower her taxable profit but not the £85,600 total. She has been in MTD since April 2026, with her rental income recorded as a separate property record.
Frequently Asked Questions
Do sole-practitioner architects and surveyors have to use Making Tax Digital?
If your gross fees plus any property income were over £50,000 in 2024–25, yes, from 6 April 2026. Over £30,000 in 2025–26 means April 2027, and over £20,000 in 2026–27 means April 2028.
Does the threshold use fees or profit?
Fees, before PI insurance, software, travel and sub-consultants. A practitioner billing £80,000 and keeping £45,000 is tested on the £80,000.
How do I treat a sub-consultant I engage and re-invoice?
If you invoice the client for the sub-consultant’s work as part of your fee, the full amount is turnover and the sub-consultant’s fee is an expense. Ask your accountant about genuine disbursements.
My practice is an LLP. Am I in MTD?
No, not for Income Tax at present. LLPs, partnerships and limited companies are outside Making Tax Digital for Income Tax, though any separate self-employed or rental income in your own name still counts.
How do staged fees affect quarterly updates?
Each update reflects what is in your records for the quarter, based on your accounting basis. On cash basis you record stage fees when they are paid, so a quiet quarter simply shows less income.
Can I use my own accounting spreadsheet?
Only with bridging software that sends your figures to HMRC. Most sole practitioners find a compatible accounting package easier, because it also tracks project invoices and sub-consultant costs.
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