Who This Affects
Sole traders working in the trades — joiners, decorators, plasterers, roofers, gardeners, mechanics, mobile beauticians, taxi and private hire drivers — are all treated the same way under MTD for Income Tax. Limited company tradespeople are outside MTD for Income Tax (but may be in scope for VAT).
What You Will Need to Track Digitally
- Every job paid by invoice, card or cash.
- Materials and tool purchases.
- Vehicle costs (mileage or actual costs, fuel, insurance, MOT).
- Subcontractor payments (with CIS where relevant).
- Phone, advertising, public liability insurance and other allowable overheads.
Recording cash and app jobs
Trades income comes in every form — a bank transfer, a card tap, cash in hand, or an app payout from a platform. All of it counts, and all of it must be recorded digitally, even the cash jobs with no invoice. The easiest habit is to log each job on your phone as you finish it: date, who it was for, the amount and what the work was. Because the threshold is based on gross takings before you deduct materials or fuel, the cash you might have overlooked in the past is exactly what can pull you into MTD.
CIS and the Construction Industry Scheme
If you work under the Construction Industry Scheme, contractors deduct CIS tax from your payments before you are paid. That does not go away under MTD — your software needs to record your gross income and the CIS tax suffered separately, so the deductions are credited correctly at your final declaration (and any refund comes through). If you are a contractor paying subcontractors, record those payments and deductions too.
Vehicle, tools and materials
Trades have real, recurring costs, and recording them well keeps your tax bill accurate. For vehicles you can claim simplified mileage (a flat rate per mile) or actual costs (fuel, insurance, servicing, a share of the purchase) — pick one and let your software apply it. Tools, materials, protective equipment, phone, public liability insurance and advertising are all allowable. Photograph receipts at the merchant so nothing is lost.
Quarterly Updates and Year-End
You will submit four quarterly updates each year summarising income and expenses — due 7 August, 7 November, 7 February and 7 May — plus a final declaration after the tax year that brings everything together and replaces the self-employment pages of your old Self Assessment return. The updates are cumulative estimates; your tax is still due once a year on 31 January.
Best Software for Trades
Trades-friendly MTD software typically focuses on mobile-first invoicing, receipt photo capture, mileage tracking and simple bank feeds. Examples include FreeAgent, QuickBooks Self-Employed, Coconut, Tide accounting, and bridging software for those who already use a spreadsheet.