Use gross figures. before materials, tools, van costs, or any other expenses are deducted.
If you're a self-employed builder, carpenter, plasterer, roofer, or any other trade running your own business, MTD applies to you on the same gross-income basis as any sole trader. but the construction trade has a couple of genuine quirks worth understanding clearly: how materials get treated, how cash jobs fit in, and how CIS interacts with your MTD obligation.
| Tax Year Assessed | Threshold | MTD Start Date |
|---|---|---|
| 2024–25 | Over £50,000 | 6 April 2026. Live since April 2026 |
| 2025–26 | Over £30,000 | 6 April 2027 |
| 2026–27 | Over £20,000 | 6 April 2028 |
There are around 700,000 self-employed people working in UK construction, accounting for more than a third of the entire workforce in the sector. meaning this is one of the trades where MTD has the largest single impact. Many builders are used to managing their own books rather than using an accountant, which makes getting the digital record-keeping habit right from day one particularly important.
This matters because builders genuinely can hit the MTD threshold faster than their actual take-home profit would suggest, a tradesman doing material-heavy jobs (kitchens, extensions, bathroom fits) can cross £50,000 gross relatively easily, even while their real profit margin after materials, van costs, and tools is much lower. The threshold test is gross invoiced income, full stop. your software then lets you claim materials as an expense, which is what actually reduces your tax bill.
Many builders and tradesmen work both directly for clients (where you invoice in full) and as a CIS sub-contractor for main contractors (where tax is deducted at source before you're paid). MTD and CIS are two separate systems that both apply to you simultaneously if relevant:
A sub-contractor who is paid £40,000 gross under CIS, with £8,000 deducted at source leaving £32,000 actually received, has £40,000 qualifying income for MTD purposes. the deduction is irrelevant to the threshold test, exactly as it is for direct client income.
| Expense Category | Examples |
|---|---|
| Materials and supplies | Anything bought and used directly on a job for a client |
| Tools and equipment | Power tools, hand tools. often via capital allowances for larger purchases |
| Vehicle costs | Van fuel, insurance, maintenance, or simplified mileage rate |
| Insurance | Public liability insurance, essential and fully allowable |
| Trade association / scheme costs | CSCS card, trade body membership, Gas Safe registration where relevant |
| Protective clothing | PPE, branded workwear, safety boots |
| Admin costs | Mobile phone (business proportion), accounting software, stationery |
The realistic challenge for builders and tradesmen isn't understanding the rules. it's finding time on a job site to log income and materials receipts properly. Approaches that work well in practice:
For software suited to mobile, on-site record-keeping, see our full software comparison. and if your work is split between CIS sub-contracting and direct client work, see our dedicatedMTD for CIS contractors guide for the CIS-specific detail.
Yes, if you invoice the client for materials as part of your overall charge, the full amount you invoice counts as gross income for MTD purposes. even though most of it passes straight back out as a materials expense. Materials cost is then claimed as an allowable business expense, which reduces your taxable profit but not your MTD qualifying income threshold.
CIS and MTD are separate systems that can both apply to you at once. CIS governs how contractors deduct tax at source from sub-contractor payments. MTD governs how you report your overall self-employment income and expenses to HMRC. If you work as a CIS sub-contractor, your gross CIS income before any deductions counts towards your MTD qualifying income threshold.
Yes. All income counts towards your MTD threshold and must be recorded in your digital records regardless of how it was paid. cash, bank transfer, cheque, or card. There is no different treatment for cash jobs.
Standard self-employment allowable expenses apply: materials and supplies, tool and equipment purchases (often via capital allowances), van costs including fuel and insurance, public liability insurance, trade association membership, protective clothing, and a proportion of mobile phone and admin costs. These are claimed in the same categories under MTD as they were under the old Self Assessment system, just tracked digitally throughout the year.
Yes. Your MTD qualifying income is your total gross self-employment income from all sources combined, regardless of job size or payment method. Small cash jobs and large invoiced contracts are added together to determine your threshold and phase.
Our free calculator checks your exact threshold, gives you your deadlines, and recommends mobile-friendly software for on-site record keeping.
Run Free MTD Check →