Making Tax Digital for Solar Panel and EV Charger Installers —
Materials, Grants & MCS Certification Explained
Materials Are a Bigger Share of Income in This Trade Than Most
Solar and EV charger installation involves some of the highest material costs relative to labour of any construction-adjacent trade — panels, inverters, batteries, and charging units are expensive components that you typically supply and invoice as part of the job. Your qualifying income is the full invoice total, materials and labour combined, before deducting what you paid your supplier. This can make your gross qualifying income look much larger than your actual profit margin, which is worth understanding clearly when checking your MTD threshold.
Grant-Funded Work and CIS Subcontracting
Some installation work is funded partly or fully through government or supplier grant schemes, where the grant is paid to you or deducted from the customer's bill. Either way, the full value of the work you deliver counts as your qualifying income. Installers who also subcontract for larger solar or EV infrastructure firms under CIS follow the standard gross-income rule: qualifying income based on your invoiced amount before the contractor's deduction.
Records for Installs, Grants and Subcontractors
Solar and EV charger work mixes domestic jobs, commercial contracts and sometimes grant-linked installs. Materials are a large share of invoices, so margins need tracking.
- Record deposits and stage payments with the customer and job reference.
- Keep panel, inverter, battery and charger supplier invoices matched to jobs.
- Keep MCS, scheme and certification fees as their own costs.
- Record subcontracted electrical or roofing work against each job.
- Keep grant and commissioning paperwork with the invoice.
Common MTD Mistakes for Solar and EV Installers
- Netting off equipment. The threshold is tested on what you invoice, not on margin.
- Recording only the balance. Deposits count when they arrive.
- Confusing grants with income. How a grant is recorded depends on the invoicing, so settle it with your accountant.
- Skipping scheme fees. They are allowable costs with receipts.
- Forgetting CIS. If you work for contractors, record gross payments.
A Sample Quarter: What the Update Looks Like
A sample quarter for an installer who also fits EV chargers.
| Q2: 6 July to 5 October 2026 | Amount |
|---|---|
| Domestic solar and battery installs | £17,800 |
| EV charger installs | £7,400 |
| Commercial and maintenance work | £3,600 |
| Total income | £28,800 |
| Panels, inverters and chargers | £14,200 |
| Subcontracted electrical work | £2,300 |
| Van, fuel and insurance | £2,100 |
| MCS fees and tools | £1,250 |
| Total expenses | £19,850 |
| Profit for the quarter | £8,950 |
Equipment is a large share of each invoice, but the full invoiced amount counts for the threshold.
Worked Example
Direct residential installs (gross, including panels/units): £37,600
CIS subcontract labour (gross, before 20% deduction): £9,400
Total qualifying income: £47,000 — above the £30,000 Phase 2 threshold, below £50,000. Zara joins MTD from April 2027. Because materials make up such a large share of each residential install's invoice value, her margin is much slimmer than her gross qualifying income suggests, but the MTD threshold is based on the gross figure regardless.
What You Can Claim
- Panels, inverters, batteries, and charging units — claimed at what you paid your supplier
- MCS certification and scheme membership fees
- Tools and testing equipment — usually claimed in full via the Annual Investment Allowance
- Van costs — fuel, insurance, or the 55p/mile mileage rate
- Public liability and professional indemnity insurance
- Continuing training — manufacturer certifications, updated regulations courses
Best MTD Software for Solar & EV Charger Installers
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 the installation price, or my margin after materials?
It's the full invoice amount, materials and labour combined, before deducting what you paid your supplier. Materials are claimed back separately as a business expense, which reduces your taxable profit but not your gross qualifying income.
Does grant-funded work count towards my qualifying income?
Yes, the full value of the work you deliver counts as qualifying income, regardless of whether it's paid by the customer directly or via a grant scheme.
Is my CIS subcontract income assessed before or after the deduction?
Before. Your qualifying income is your gross invoiced amount, not the amount you actually receive after the contractor's CIS deduction.
Can I claim my MCS certification fees?
Yes, professional certification and scheme membership required for your work is a normal allowable business expense.
My gross income looks high because of material costs, but my actual profit is much lower. Does that matter for MTD?
No, MTD eligibility is based on your gross qualifying income, not your profit margin. This does mean installers can be closer to a threshold than their genuine earnings might suggest, worth checking carefully.