Essential checklist for self employed and CIS workers preparing for Making Tax Digital. Understand the new HMRC rules and how to stay compliant.
The UK tax system is changing as HMRC introduces Making Tax Digital (MTD). For many self employed individuals and CIS workers, these new rules may feel confusing or worrying.
However, with the right preparation and guidance, the transition can be straightforward. Understanding what MTD means and what steps you need to take now will help you avoid stress and stay compliant with HMRC.
This guide explains the essentials in plain English so you know exactly what to expect.
If you’re self‑employed or working under CIS and need support, Tax2u is here to help
What is Making Tax Digital
Making Tax Digital is a government initiative designed to modernise the UK tax system. HMRC is gradually moving away from traditional tax returns and introducing a system where taxpayers keep digital records and submit updates online.
Under MTD, businesses and self employed individuals will need to:
• Keep digital records of income and expenses
• Use compatible accounting software
• Send quarterly updates to HMRC
• Submit a final declaration at the end of the tax year
The goal is to make tax reporting more accurate and reduce errors.
Who MTD will apply to
Making Tax Digital will apply to many taxpayers who currently complete a Self Assessment tax return.
The rules are expected to apply to:
• Self employed individuals earning above the income threshold
• Landlords with qualifying property income
• Individuals who submit Self Assessment returns for business income
Many CIS workers who work within the construction industry will also be affected if they are registered as self employed and complete Self Assessment.
Understanding whether these rules apply to you is an important first step.
Why MTD matters for self employed and CIS workers
For many taxpayers, the biggest change is the move from one annual tax return to a system of regular digital reporting.
Instead of submitting everything once a year, MTD will require:
• Quarterly income and expense updates
• Digital record keeping throughout the year
• A final end of year submission
This means good record keeping will become more important than ever.
While this may feel like extra work at first, many taxpayers find that digital systems make it easier to track income and stay organised.
Digital record keeping requirements
Under MTD rules, HMRC expects taxpayers to keep their records digitally.
This usually means using accounting software or apps that can store information such as:
• Business income
• Allowable expenses
• CIS deductions
• Business bank transactions
Paper records alone will no longer meet the requirements once MTD becomes mandatory.
Using digital tools can also make preparing your Self Assessment information quicker and more accurate.
How CIS workers should prepare
Construction Industry Scheme workers often have additional tax considerations because contractors deduct tax before payment.
If you are a CIS subcontractor, it is important to keep clear records of:
• Payments received from contractors
• CIS tax deductions
• Business expenses such as tools, travel, and insurance
These records will form part of your digital submissions under MTD.
Good organisation now will make the transition much easier once the new rules take effect.
Common concerns about Making Tax Digital
Many taxpayers worry about the impact of the new rules. Common concerns include:
• Not understanding the software requirements
• Fear of making mistakes when reporting income
• Uncertainty about quarterly submissions
• Concern about additional administration
The good news is that professional tax support can simplify the entire process.
Working with an experienced tax adviser can help ensure your records are correct and your submissions are completed properly.
Practical steps you can take now
If you are self employed or working under the Construction Industry Scheme, there are several simple steps you can take now.
Start by reviewing how you currently keep your records and consider moving to digital tools if you have not already done so.
You should also make sure that:
• All income and expenses are recorded regularly
• CIS deduction statements are kept safely
• Business records are organised and easy to access
Preparing early will help you avoid last minute pressure when MTD becomes mandatory.
How professional support can help
Making Tax Digital is a significant change to the way many people manage their tax affairs.
Professional support can help you choose the right software, organise your records, and ensure your Self Assessment obligations continue to be met under the new rules.
With the right guidance, MTD can become a manageable part of running your business rather than a source of stress.