Making Tax Digital for Mobile Mechanics —
Parts vs Labour Explained
Parts and Labour Both Count — Even Though They Feel Different
Most mobile mechanics invoice customers for two very different things on the same job: your labour (the actual skill and time), and the parts you sourced and fitted, often bought from a motor factor at trade price and marked up slightly when you invoice the customer. It's tempting to think only your labour "counts" as your income, since the parts money just passes through to cover what you paid out.
For MTD purposes, it doesn't work that way. Your qualifying income is your full invoice total, parts and labour combined, before you deduct what you paid the motor factor for the parts. What you spent on parts is then claimed back as a business expense, reducing your taxable profit, but it doesn't reduce the gross income figure used to check your MTD threshold.
Call-Out Fees, Diagnostics, and Emergency Work
Call-out fees, diagnostic charges, and emergency out-of-hours premiums are all separate income streams from the actual repair work, but they combine into the same qualifying income total. Many mobile mechanics run a mix of scheduled bookings (services, MOTs prep, brake jobs) and reactive call-outs (breakdowns, won't-starts) — both count identically.
Records for Call-Outs, Parts and Diagnostics
A mobile mechanic works at customers’ homes and workplaces, buying parts as needed. A job log with parts linked shows both income and margin.
- Log each job: vehicle, work done, labour, parts charged and payment method.
- Record call-out and diagnostic fees as income, including those with no repair.
- Keep parts supplier receipts and account statements matched to jobs.
- Keep tool, diagnostic equipment and van costs, treating larger items as capital.
- Keep insurance and training costs.
Common Mistakes Mobile Mechanics Make
- Counting parts as separate. If you charge customers for parts, that charge is income and the cost is an expense.
- Forgetting diagnostic fees. A charged diagnostic is income even if the customer does not repair.
- Missing cash. Cash jobs count exactly like transfers.
- Treating equipment as small. A diagnostic machine or lift is a capital item.
- Skipping vehicle logs. The van is both transport and workshop.
A Sample Quarter: What the Update Looks Like
A sample quarter for a mobile mechanic with steady domestic work.
| Q2: 6 July to 5 October 2026 | Amount |
|---|---|
| Labour charges | £8,600 |
| Parts charged to customers | £6,100 |
| Diagnostics and call-out fees | £1,400 |
| Total income | £16,100 |
| Parts bought | £4,900 |
| Van, fuel and insurance | £2,200 |
| Tools and diagnostic software | £900 |
| Phone and advertising | £340 |
| Total expenses | £8,340 |
| Profit for the quarter | £7,760 |
Parts charged to customers are income, and the parts you bought are an expense. Both belong in the records.
Worked Example
Labour charged across the year: £24,800
Parts invoiced to customers (gross, before what he paid the motor factor): £13,600
Call-out and diagnostic fees: £4,100
Total qualifying income: £42,500 — above the £30,000 Phase 2 threshold. Noah joins MTD from April 2027. The roughly £9,800 he actually paid the motor factor for those parts is claimed as an expense against his profit, but it doesn't reduce his £42,500 qualifying income figure.
What You Can Claim
- Parts bought for customer jobs — claimed at what you actually paid the motor factor or supplier
- Van costs — fuel, insurance, servicing, or the 55p/mile mileage rate
- Tools and diagnostic equipment — usually claimed in full via the Annual Investment Allowance
- Trade account fees and motor factor memberships
- Public liability and professional indemnity insurance
- Training and manufacturer-specific certification courses
- Workwear and protective equipment
Best MTD Software for Mobile Mechanics
Software links are affiliate, help fund CheckMyMTD. Recommendations based on ease of use for self-employed income tracking.
Frequently Asked Questions
Is my qualifying income just my labour, or parts too?
Your full invoice total, both parts and labour combined, counts as your qualifying income. What you paid for the parts is then claimed back separately as a business expense, which reduces your taxable profit but not your gross qualifying income figure.
Do call-out fees count differently to the repair itself?
No, call-out fees, diagnostic charges, and the repair labour all combine into the same qualifying income total, regardless of how you itemise them on the invoice.
Can I claim the full cost of new diagnostic equipment straight away?
In most cases yes, via the Annual Investment Allowance, which lets you deduct the full cost against your profit in the year you buy it, up to a £1 million annual limit.
Should I use actual van costs or the mileage rate?
Either is allowed, but you need to pick one method per vehicle and stick with it consistently for that vehicle — you can't switch between actual costs and the mileage rate year to year for the same van.
I do some jobs through a booking app and some direct. Do both count?
Yes, all self-employment income combines into one qualifying income figure, whether it comes through a booking platform or direct customer contact.