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The government’s Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) is coming – and if you’re a self-employed builder, electrician, plumber, or any other sole trader within the construction sector, it’s time to get prepared.
After successfully rolling out MTD for VAT in 2019, HMRC is now moving forward with digital reporting for income tax. This means you’ll need to keep digital records and submit income updates quarterly—not just once a year.
Who will be affected?
You’ll be affected by MTD for ITSA if:
- You’re registered for Self-Assessment
- You earn income from self-employment (e.g. construction work, subcontracting)
- You earn rental income as a landlord
- Your gross income (before expenses) is over:
£50,000 in 2024/25
£30,000 in 2025/26
£20,000 in 2026/27
Example: If your total turnover from self-employment as a builder in 2024/25 is £52,000, you’ll need to comply with MTD from April 2026.
What counts as qualifying income?
For sole traders in the construction and property sector, qualifying income includes:
- Turnover from self-employment (before expenses)
- Rental income, if you also let out property
- Certain types of trust or investment income
If you have multiple income sources (e.g. building work + rental property), they’re added together to assess if you meet the threshold.
When will you need to start?
| Tax Year Assessed | Income Threshold | MTD Start Date | First MTD Tax Year |
| 2024/25 | £50,000 | 6 April 2026 | 2026/27 |
| 2025/26 | £30,000 | 6 April 2027 | 2027/28 |
| 2026/27 | £20,000 | 6 April 2028 | 2028/29 |
What will change for you?
Instead of submitting one tax return a year, you’ll need to:
- Submit quarterly updates of income and expenses to HMRC
- Keep digital records of your business transactions with compatible software
- File a final digital tax return at year-end (similar to the current Self-Assessment)
If you have just one trade, you’ll submit 4 updates per year. If you also have rental income, you’ll need to submit 8 updates (4 for each source).
MTD quarterly deadlines
| Quarter | Period Covered | Filing Deadline |
| Q1 | Apr–Jun | 7 August |
| Q2 | Jul–Sep | 7 November |
| Q3 | Oct–Dec | 7 February |
| Q4 | Jan–Mar | 7 May |
What if you don’t comply?
MTD is mandatory, and failing to comply could result in penalties from HMRC. It’s important to get ahead of the changes now so you’re not caught out later.
How to get prepared?
You can start preparing now by:
- Switching to digital record keeping (if you haven’t already)
- Exploring software options that suit your business
- Checking if your current system is HMRC-approved
To find out more about the changes read our MTD Commonly Asked Questions here or for more detailed advice to support your transition contact one of the team on 0330 058 6559 or email hello@scruttonbland.co.uk
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