Total job income, gross (labour + materials invoiced)
£
CIS sub-contracting income (gross, before deductions)
£
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.
Your MTD Threshold as a Builder or Tradesman
Tax Year Assessed
Threshold
MTD Start Date
2024–25
Over £50,000
6 April 2026 — mandatory now
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.
Materials — Why Your "Income" Looks Bigger Than It Feels
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The most common confusion in this trade: If you invoice a client £18,000 for a kitchen extension, and £11,000 of that is materials you bought and supplied, your MTD qualifying income from that job is the full £18,000 — not the £7,000 labour element. Materials are a business expense you claim separately, not a deduction from your gross income figure.
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.
How MTD and CIS Work Together
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:
CIS governs how the contractor deducts tax (usually 20% or 30%) from your payment before it reaches you — this is a payment-on-account system, not your final tax bill
MTD governs how you report your overall self-employment income and expenses to HMRC through quarterly updates and a Final Declaration
Your CIS income counts towards your MTD threshold using the gross figure — before the CIS deduction, not after
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.
Cash Jobs — No Different Treatment
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Cash counts the same as everything else. Every pound received from a client — cash in hand, bank transfer, cheque, or card — counts towards your gross income and your MTD threshold equally. There is no separate or lower-scrutiny category for cash jobs. Under-recording cash income is straightforward tax evasion, and HMRC's digital record-keeping requirement under MTD makes inconsistent records considerably easier to spot than under the old annual Self Assessment system.
What You Can Claim as a Builder or Tradesman
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
Practical Digital Records for a Busy Trade
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:
Photograph every materials receipt at the till using your MTD software's mobile app, before it gets lost or faded in a van or toolbox
Invoice promptly so income gets logged close to when the job happens, not reconstructed weeks later from memory
Keep a simple job log noting client, job value, and materials cost per job — this makes quarterly categorisation far faster
Separate your business bank account if you haven't already — mixing personal and trade spending makes digital record-keeping considerably harder under MTD than it needed to be under annual Self Assessment
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 dedicated MTD for CIS contractors guide for the CIS-specific detail.
Frequently Asked Questions
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.
Check Your Full MTD Position
Our free calculator checks your exact threshold, gives you your deadlines, and recommends mobile-friendly software for on-site record keeping.