CIS as both contractor and subcontractor, project deposits, staged payments and a materials float. Here's how Making Tax Digital for Income Tax applies to builders, and when it starts for you.
MTD for Income Tax is measured on gross income before expenses. With materials and subcontractor costs passing through your accounts, most builders are well over the line.
Many builders deduct CIS from the subbies they pay while having CIS deducted from them on other jobs. MTD does not change any of that. It sits alongside CIS as the way you report your own income and expenses each quarter.
Your annual Self Assessment return is replaced by four short quarterly updates and a year-end final declaration, all through recognised software.
Log deposits and staged payments as they land so each quarter reflects the real cash coming in and going out.
Deducting from subbies and having CIS deducted from you can both apply. Keep both recorded so nothing is double counted.
Record income as it is invoiced or received so a deposit sits in the right quarter, with the matching materials as an expense.
Buying materials up front is normal. Recorded as expenses, they offset the income when the job invoices, so your profit stays true.
Access towers, mixers and tool hire are deductible. Snap the hire invoices so they land against the right project.
You already juggle CIS both ways. Clear Books keeps your own income reporting tidy on top, and gives HMRC exactly what MTD requires.
Record materials, subbies and stage payments as you go, and send your first quarterly update in minutes.
