Quick answer
Self-employed tradespeople count their total invoiced income towards the MTD threshold, including what customers pay for materials. Work for contractors under CIS counts at the gross amount, before the CIS deduction. Many sole-trader trades are over £30,000 in turnover even on modest profits.
Key facts
Turnover includes materials you charge for
CIS work counts at the gross payment, before deductions
Vans and tools: capital allowances or expenses, depending on your accounting
Protective clothing is allowable; everyday workwear isn’t
Why tradespeople reach the threshold quickly
If you buy materials and charge the customer for them, the full invoice is your turnover. A plumber who invoices £36,000 in a year, of which £14,000 is boilers and parts, has £36,000 of turnover for MTD, not £22,000.
Start date | Qualifying income over | Based on your tax return for |
|---|---|---|
6 April 2026 | £50,000 | 2024/25 |
6 April 2027 | £30,000 | 2025/26 |
6 April 2028 | £20,000 | 2026/27 |
CIS and private customers
When you work for a contractor under the Construction Industry Scheme, they deduct 20% (or 30% if you’re not registered) and pass it to HMRC. Your turnover is the gross payment. Work for customers who aren’t making CIS deductions is paid in full. Many trades do both, and both go in the same quarterly updates. See MTD for CIS subcontractors.
Vans and tools
Under the cash basis, tools and equipment are usually claimed as expenses when you buy them, while cars are claimed through capital allowances. Vans used for work can use either actual costs or the flat mileage rate (55p a mile for the first 10,000 miles in 2026/27). See claiming business equipment.
Clothing
Safety boots, hard hats and overalls used only for work can be claimed. Everyday clothing can’t, even if you only wear it on site.
Records that save time
Keep supplier receipts with the job they relate to
Use a business card for materials, so a bank feed picks them up
Record CIS statements from each contractor monthly
Log van mileage if you use the flat rate
Use the MTD checker to see your own start date.