Making Tax Digital for Income Tax is no longer a distant change for the construction industry. It became mandatory from 6 April 2026 for some sole traders, and more businesses will be brought in over the following two tax years.
The aim is not to make you pay tax four times a year. It changes how records are kept and how income and expense summaries are sent to HMRC.
1. Check when the rules apply to you
The start date is based on qualifying income from self-employment and property before expenses. HMRC’s current timetable says the rules apply from 6 April 2026 where qualifying income for 2024/25 was over £50,000; from 6 April 2027 where qualifying income for 2025/26 is over £30,000; and from 6 April 2028 where qualifying income for 2026/27 is over £20,000.
If you have more than one self-employed business or property income as well as trade income, the qualifying amounts may be combined. Check HMRC’s guidance or ask your accountant rather than looking only at one stream.
2. Keep digital records of income and expenses
You will need compatible software to create, store and correct digital records. For a trade business, that means keeping sales and expense information organised throughout the year instead of rebuilding twelve months of activity from bank statements and faded receipts in January.
Record income when required by your accounting method and capture expenses with enough detail to classify them correctly. Keep the supporting invoice or receipt even when the transaction is stored digitally.
3. Send quarterly updates
Compatible software is used to send summary updates of income and expenses to HMRC during the year. These are not four complete tax returns and they do not automatically create four tax-payment dates.
Quarterly updates are designed to keep the digital record current. Waiting until the deadline to enter a full quarter at once rather defeats the point and recreates the same admin panic in smaller instalments.
4. Complete the year-end tax process
After the tax year, you will still need to finalise the figures, make any accounting or tax adjustments, submit the required tax return information and pay the tax due by the normal deadline.
Your accountant can still support you. A good system should make their job easier by giving them clean, consistent records rather than photos, messages and spreadsheets that do not agree.
5. Build a simple weekly routine now
Choose one short weekly admin slot. Send completed invoices, photograph receipts, categorise expenses, check unpaid amounts and confirm that each transaction belongs to the right job. Five calm minutes every few days is far easier than an annual archaeological dig through the van.
6. Choose tools that work together
HMRC requires software that is compatible with Making Tax Digital for Income Tax. Tradeways is designed to organise the operational side of a trade business, including clients, jobs, proposals, invoices, files and financial information. Check the current integration options and confirm with your accountant how information will move into the HMRC-compatible software you use.
This article reflects HMRC guidance available in July 2026. Tax rules and software availability can change, so verify the latest position before acting.