Self-employed? HMRC's Making Tax Digital has started — here's what changes

Making Tax Digital for Income Tax went live on 6 April 2026. If you are a sole trader — and most CIS subcontractors are — with gross income over £50,000 a year, you now have to keep your records digitally and send HMRC an update every quarter through recognised software, instead of one Self Assessment return a year.

The trap everyone falls into: the £50,000 is your GROSS income — total invoiced turnover before any expenses — not your profit. A subbie invoicing £55,000 but taking home £35,000 is still in.

And this is only phase one. From April 2027 the threshold drops to £30,000, and from April 2028 to £20,000. Within two years, most people working for themselves in construction will be in the system.

What to do now: check your turnover for the last tax year; if you are over the line, get MTD-compatible software or an accountant who files through one — do not wait for a letter from HMRC.

One thing that does NOT change: CIS deductions from your pay work exactly as before. MTD changes how you report, not how much tax you pay.