Making Tax Digital is Coming.
Are You Ready?
The biggest change to tax in a generation is here for CIS Subcontractors. This interactive guide breaks down everything you need to know about MTD for ITSA.
Check When You Start MTD
What’s Actually Changing?
The annual tax return is being replaced by a new, continuous cycle of digital reporting. Understand the new process at a glance.
The Old Way
(Until Now)
Invoices and receipts stored in folders or shoeboxes.
Submit everything once per year by 31 Jan.
The MTD Way
(From 2026)
📱 Digital Records
All income and expenses must be recorded using MTD-compatible software.
📤 Quarterly Updates
Submit summaries of income/expenses every 3 months. Not tax payments.
📊 End of Period Statement (EOPS)
Finalise your records after the tax year. Includes adjustments like allowances.
✅ Final Declaration
Combine business income with other income (like interest) to calculate final tax bill.
CIS rebates will still be issued only once per year — after you submit your Final Declaration.
The 5 Key Challenges for Subbies
MTD isn’t just a new form to fill in; it’s a new way of working. Here are the main hurdles you’ll need to overcome. Click each one to learn more.
🔄 Admin Overhaul
The “shoebox of receipts” is dead. You’ll need to capture invoices and expenses as they happen using digital tools.
💷 Cash Flow Conundrum
You’ll need to submit quarterly updates even during slow periods — meaning better planning and consistency.
💻 Technology Hurdle
You must pick and learn HMRC-approved software — including apps or cloud systems you may not have used before.
💰 Cost of Compliance
Software, accountancy fees, and possibly a better phone or laptop may now become essential business expenses.
🚨 Penalty Risk
Miss 4 deadlines and you’ll face a £200 automatic fine. MTD introduces a new points-based penalty system.
Your MTD-Ready Toolkit
Use these practical tools and habits to make your transition to MTD as smooth as possible.
🧾 Preparation Checklist
- ✅ Determine your start date using the calculator above
- ✅ Start taking photos of receipts and saving CIS statements digitally
- ✅ Research HMRC-approved software with CIS support
- ✅ Talk to your accountant about MTD support and fees
- ✅ Join HMRC’s pilot scheme if you want to test early
💻 Software Chooser
- 📱 QuickBooks: Great mobile app, easy for sole traders
- 📦 Xero: Ideal for growing businesses with integrations
- 🆓 FreeAgent: Often free for Mettle/NatWest users
- 🔍 Clear Books: Strong CIS module built in
- 🏢 Sage Accounting: Trusted, robust features
✅ Best Practices
- 📸 Capture expenses immediately using your app
- 📄 Always separate labour and materials on invoices
- 🏦 Enable bank feeds to auto-import transactions
- 📁 Attach PDF CIS statements to payments for tracking
Need Help Getting Ready for MTD?
Book a free chat with our team to walk through your options – no pressure, just support.