Workshop and on-site work, timber costs, bespoke commissions with deposits and a shop full of tools. Here's how Making Tax Digital for Income Tax applies to you, and when it starts.
MTD for Income Tax is measured on gross income before expenses. Timber and materials for larger commissions push your gross turnover up faster than the profit alone.
Whether you're cutting in the workshop or fitting on site, it's all one self-employed business. Recording income and costs against each job keeps your quarterly figures clean without splitting your admin in two.
Your annual Self Assessment return is replaced by four short quarterly updates and a year-end final declaration, all through recognised software.
Log timber merchant receipts against the commission they belong to, so each job's margin is clear.
A deposit is income when received. Record it against the job so the eventual balance and materials all line up.
Sheet goods and hardwood are real costs. Logged against the job, they offset the income so you're taxed on the margin.
Big machines go through capital allowances; smaller tools are expensed. Keep both recorded and nothing is missed.
If you subcontract on construction sites, CIS may be deducted from your labour. It still counts towards your tax, reconciled through MTD.
You'd rather be making sawdust than doing paperwork. Clear Books keeps your records tidy from your phone or the shop PC, and gives HMRC exactly what MTD needs.
Record deposits, timber and tools as you go, and send your first quarterly update in minutes.
