Making Tax Digital With MAXMTD

So Long, Self-Assessment

Since its introduction in 1997, self-employed sole traders, CIS subcontractors and self-employed tradesmen have relied on the annual self-assessment tax return to claim their CIS Tax refunds and Tax Rebates.

For many, completing a self-assessment tax return was a once-a-year task. Some chose to submit their return themselves. Others preferred to work with an accountant or tax return preparer to avoid the hassle and ensure maximum tax savings alongside full compliance.

At Max Taxback, we have built our reputation as CIS tax return specialists, with over twenty years of experience submitting CIS tax refund claims for thousands of self-employed tradesmen across the United Kingdom.

However, as artificial intelligence, online systems and digital technologies have advanced, so too has the United Kingdom tax system.

For anyone reporting a turnover (gross pay before tax) of over £50,000 in the 2024/25 tax year, the shift is clear. The era of the annual self-assessment tax return is ending.It is now time to prepare for Making Tax Digital for Income Tax.

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When Will MTD Affect Me?

Phase 1: April 2026

Threshold is income of £50,000

Self-employed individuals and landlords with income over this amount must join MTD for Income Tax.

Phase 2: April 2027

The threshold drops to £30,000.

 This will bring many more construction workers into MTD

Phase 3: April 2028

The threshold drops to £20,000.

This will bring most construction workers into MTD

Hello, Making Tax Digital

So Why the Change?

HMRC’s stated claim is to reduce the tax gap and encourage accurate and compliant reporting.

On paper, that claim is easy to understand.

We have all heard stories of CIS Tax refunds of £4,000, £5,000 or even £6,000 and more. In some cases, these reflect legitimate and well-supported claims. In others, self-assessment tax returns are prepared in a way that pushes the boundaries of what is allowable, or in the worst cases, are simply falsified to generate a larger CIS Tax refund.

Reputable accountants, CIS tax return specialists and self-assessment preparers are highly unlikely to submit knowingly false claims. Doing so would place not only the taxpayer at risk of HMRC investigation, but also their accountancy practice and every associated CIS subcontractor client.

The reality, however, is that there are not enough compliance case officers at HMRC to manually review the volume of annual self-assessment tax returns submitted each year.

In response to this imbalance between volume and oversight, HMRC has invested an estimated £1.5 billion to introduce Making Tax Digital for Income Tax. The aim is to increase transparency, reduce error, and enforce more accurate digital reporting throughout the year.

Big Brother Just Got Bigger

Making Tax Digital is the biggest change to the UK tax system since Self-Assessment was introduced in 1997.

First discussed in 2015 and delayed several times, Making Tax Digital for Income Tax is now live and being rolled out in phases.

From April 2026, many self-employed individuals and CIS subcontractors will be legally required to report their income and expenses digitally throughout the year, rather than relying solely on the traditional end-of-year self-assessment tax return.

While very few taxpayers, and even fewer accountants, welcome this change, it is unavoidable.

For anyone who reported income of over £50,000 in the 2024/25 tax year, the transition to Making Tax Digital is no longer a theoretical concept, that will never happen.

This is happening right now, have questions? Give us a call: 020 3822 0201

So, let’s dig into some of these key changes in a little more depth.

MTD for Income Tax – A Revolution for Tax Returns and Self-Assessment

Making Tax Digital replaces the traditional annual self-assessment tax return with a fully digital reporting system.

In a nutshell, MTD is a direct digital link between your business bank account, your accounting software, and HMRC.

Once enrolled in Making Tax Digital, you will be required to:

  • Use a dedicated business bank account rather than a personal current account
  • Use approved accounting software such as QuickBooks, Xero or Sage
    (No, HMRC does not provide free MTD accounting software)
  • Keep digital records, including receipts, invoices, and mileage logs
  • Maintain digital bookkeeping within recognised MTD-approved accounting software
  • Submit four quarterly updates each year – Similar to a VAT return.
  • Submit a final end-of-year declaration digitally – similar to the current end of year self-assessment tax return

Digital record keeping means every business transaction must be correctly categorised within your accounting software.

For example, a receipt for tools purchased at Screwfix must be recorded in the correct expense category, with the digital receipt attached and available for inspection.

Each quarterly update is similar in concept to a VAT return.

Every three months, your accounting software must submit a summary of all business income and expenses directly to HMRC.

At the end of the tax year, a final end-of-year declaration replaces the traditional self-assessment tax return and is again submitted digitally through your software.

What This Means in Practice

The digital link between your business bank account, your accounting software and HMRC removes the ability to estimate figures.

Only genuine, allowable transactions supported by bank records can be included.

Estimated claims will no longer be accepted. Expense claims that do not genuinely exist will not pass through the system.

For Construction industry professionals and self-employed CIS subcontractors, this represents a particularly significant shift.

Record keeping can already be challenging when travelling between multiple sites and locations throughout the year.

Making Tax Digital introduces not only additional reporting requirements, but also a greater need for accurate systems and ongoing professional oversight.

For many self-employed tradesmen and CIS subcontractors, this will mean an increased investment of time, resources and, in most cases, structured accountancy support.

Our Position on Making Tax Digital

We are open and honest about Making Tax Digital.

While we do not agree with HMRC’s approach or the additional burden it places on small businesses and the brilliant trade force we proudly support across the UK.

We do believe firmly in accurate, compliant reporting and protecting our clients from unnecessary risk.

The first wave of taxpayers included in Making Tax Digital consists of self-employed individuals with an income over £50,000.

It is also widely recognised that many individuals earning significantly higher levels of income often trade through a limited company for tax efficiency reasons and are therefore outside the current scope of Making Tax Digital for Income Tax.

As a result, the initial catchment for the first phase of MTD is relatively small within the self-employed sector.

There is a legitimate discussion to be had about whether similar outcomes could have been achieved through enhanced compliance checks and improved use of technology, rather than mandating digital reporting across such a broad group of taxpayers.

However, our role is not to debate policy. Our role is to protect you.

Despite our reservations about the structure of Making Tax Digital, we are fully committed to ensuring that you meet HMRC’s digital requirements while doing everything possible to maximise legitimate tax savings.

You stay compliant. We handle the complexity – Have questions? Give us a call: 020 3822 0201

Introducing: Let’s Get Digital

Now that we understand what Making Tax Digital involves, and how it differs from the traditional self-assessment and CIS tax refund claim process, the real question is simple:

How do we minimise the impact of MTD on our clients and taxpayers across the United Kingdom?

The answer is straightforward.

Let’s Get Digital is our fully managed Making Tax Digital service.

It has been constructed specifically for Construction industry professionals who want the complexities of MTD compliance handled correctly, with minimal disruption to their time spent on site.

This is a fully managed, United Kingdom-based, all-inclusive service.

There are no bolt-ons.
No hidden extras.
No fragmented providers.

Every package includes:

  • Approved MTD accounting software
  • Ongoing United Kingdom-based bookkeeping, provided by MIAB-qualified bookkeepers
  • All quarterly Making Tax Digital submissions
  • End-of-year tax return submission
  • Direct support from United Kingdom-based qualified accountants
  • 24/7 WhatsApp support for questions, reassurance, and guidance

We emphasise our United Kingdom-based support as a premium differentiator. Many firms operating in this space quietly outsource bookkeeping and processing overseas. We do not.

Your records are handled by qualified professionals who understand the United Kingdom tax system, the Construction industry, and the specific nuances of CIS tax refund claims.

In short, everything is managed for you, by experienced professionals with over twenty years of experience proudly supporting UK construction trades.

For many self-employed tradesmen and CIS subcontractors, Making Tax Digital may be your first introduction to:

  • Accounting software
  • Bookkeeping
  • Digital record keeping
  • Quarterly HMRC reporting

With that naturally comes questions, uncertainty, and sometimes the need for reassurance.

That is why our support does not stop at submission deadlines.

Our clients benefit from 24/7 WhatsApp support, ensuring that guidance is available whenever it is required — whether it is a quick question or something more involved.

You are never left to navigate the system alone.

We specialise in working within the trade industry, supporting electricians, plumbers, bricklayers, gas engineers, solar installers, carpenters, dry liners, plant operators and CIS subcontractors.

We understand:

  • How site-based income works
  • CIS deductions, agency fees, payroll company margins.
  • Tools, vehicles, fuel, materials, food and drink, travel, digs etc.
  • The realities of working on site rather than behind a desk

Our Let’s Get Digital service ensures your time is focused on earning and running your business.

We take care of the reporting.

Let’s Get Digital Pricing – Simple, Transparent, Fully Deductible

Our pricing is straightforward and transparent, based on the size and complexity of your business.

Monthly packages range from £125 to £225, depending on factors such as:

  • Volume of transactions
  • CIS involvement
  • Additional income sources
  • All fees are 100 percent tax deductible as a business expense.

In practical terms, the most noticeable impact of Making Tax Digital for many clients will be an increase in accountancy fees.

However, those fees are fully allowable and are often offset by improved accuracy, structured bookkeeping, and better-managed tax efficiency.

Why Our Pricing Reflects the Work Involved

Making Tax Digital does not simply replace an annual self-assessment tax return.

It introduces:

  • Accounting software configuration
  • Ongoing digital bookkeeping
  • Quarterly reviews and submission
  • End-of-year declaration
  • Continuous compliance oversight
  • Ongoing client support

The volume of work increases by approximately eight times compared to a once-a-year filing, when you include:

  • The Setup and configuration of the accounting software
  • Actual bookkeeping done by qualified humans who are available to discuss transactions and queries with you on your time, and by WhatsApp,
  • The quarterly reviews,
  • The conversations around submission
  • The signoffs
  • The ongoing UK based support.
  • The end of year update

We are aware that some firms advertise fully managed Making Tax Digital services at only a modest increase over a traditional annual self-assessment fee.

Every business sets its own pricing structure.

However, delivering compliant digital bookkeeping, quarterly reporting, software management, professional review and responsive support requires time, qualified oversight and consistent attention to detail.

Our pricing reflects the level of due care and professional diligence required to do this properly.

It would not be realistic for us to provide the same level of United Kingdom-based human review, structured bookkeeping, quarterly compliance oversight and premium customer service for fees in the region of £35 per month.

When pricing appears significantly below the level required to support the genuine workload involved, it is reasonable to ask how much direct professional oversight is taking place and what level of human review is being applied to your records.

We do not compete on being the cheapest.

We compete on doing the job correctly.

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Experience You Can Trust

We are United Kingdom-based qualified accountants and bookkeepers with over twenty years’ experience proudly supporting UK based construction businesses and self-employed tradespeople.

That experience matters more than ever under Making Tax Digital, where errors, inconsistencies and missed submissions can lead to penalties.

Our clients benefit from:

  • Accurate digital reporting
  • Full HMRC compliance
  • Well-supported, legitimate tax savings
  • Direct access to United Kingdom-qualified professionals
  • On-demand, WhatsApp support when it is needed

We are proud to be a UK-based accounting firm and proud to be supporting United Kingdom tradespeople.

Your records are handled by qualified professionals who understand the Construction industry, the CIS scheme and the realities of working on site.

HMRC Letters and the First Phase of MTD

HMRC has already begun contacting taxpayers who fall within the first phase of Making Tax Digital.

If you have received a letter advising you to speak to your accountant about new digital reporting requirements, it is important to act early. The transition to Making Tax Digital involves software setup, structural changes and ongoing compliance planning, so leaving it until the last minute is rarely advisable.

If you have not yet received a letter but believe your income places you within scope, we would encourage you to seek clarity now rather than wait for formal notification.

Whether you have received correspondence or simply want reassurance, we are happy to review your position and guide you through the next steps.

Making Tax Digital for Self-Employed Construction Workers

Making Tax Digital for Income Tax applies to self-employed individuals and landlords whose income exceeds HMRC thresholds.

For self-employed construction workers, including electricians, plumbers and CIS subcontractors, this represents a permanent shift in how Self-Assessment is reported.

Speak to Us

If you would like to discuss Making Tax Digital or understand how it applies to your business, we are happy to help.

Call us today and we will guide you through the next steps clearly and professionally.

If you have any questions relating to your tax returns or tax advice in general, please leave us a message below and we will come back to you within 72 hours. 

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