CIS Subcontractors: How to Stay Compliant with MTD (And Avoid Penalties)

If you’re a CIS-registered subcontractor, chances are you’ve heard the term Making Tax Digital (MTD) being thrown around — and probably pushed it to the bottom of your to-do list.

You're not alone.

But here’s the thing… From April 2026, MTD for Income Tax Self Assessment (MTD for ITSA) becomes mandatory for most sole traders and CIS subcontractors earning over £50,000. That means big changes in how you manage and submit your tax information to HMRC.

And if you’re not prepared? 

The result could be penalties, stress, and missed deadlines — all completely avoidable with the right support.

Let’s break it down…

What Is Making Tax Digital (MTD) for CIS Subcontractors?

HMRC’s MTD for ITSA is part of a wider plan to modernise the tax system. Instead of sending one tax return per year, you’ll be required to:

• Keep digital records of all income and expenses

• Use HMRC-approved software (like Xero)

• Submit quarterly updates to HMRC

• File a final year-end declaration

Paper receipts, spreadsheets, and leaving things to the last minute just won’t cut it anymore.

Why This Matters If You’re a CIS Subcontractor

As someone working in the construction industry, your days are already full. You're managing jobs, quoting work, and keeping clients happy — the last thing you need is more paperwork and complex software.

But MTD isn’t optional.

If you’re earning over the threshold and filing your own tax return, MTD for ITSA will apply to you. And even if your income is under £50,000 right now, the rules are likely to expand in future.

Delaying getting set up could mean:

• Rushing to learn new software just before the deadline

• Submitting your figures incorrectly

• Facing HMRC fines for non-compliance

The earlier you prepare, the smoother it will be.

What You’ll Need to Stay Compliant

Here’s a quick checklist of what you’ll need to get MTD-ready:

✅ Digital bookkeeping software (like Xero)

✅ A way to store receipts and invoices digitally (e.g. Hubdoc)

✅ Accurate records of your business expenses

✅ A process for submitting quarterly updates

✅ Confidence in what you can and can’t claim

Sounds like a lot? It is — unless you have the right support.

Good News: You Don’t Have to Do It Alone

At Rosebery Accountancy, we’ve created a dedicated solution just for CIS subcontractors like you: The CIS Subcontractor MTD Package.

We take care of everything — so you can keep your focus on site, not spreadsheets.

What’s Included:

• Monthly or quarterly bookkeeping

• Quarterly MTD submissions to HMRC

• Access to Xero and Hubdoc (included)

• Email and phone support

• Year-end Self Assessment

• Deadline reminders

• One fixed monthly fee

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All done for you — no guesswork, no overwhelm, and no hidden costs.

The Time to Act is Now

2026 might feel far away — but if you’re still relying on paper records or spreadsheets, now’s the perfect time to get set up gradually and feel confident before the deadline hits.

Whether you want help getting your software sorted, understanding your expenses, or handing the whole thing over…

I’m here to help.

If you're a CIS subcontractor and want to take the pressure off, check out the CIS MTD Package here or get in touch for a friendly chat about how we can support your business.

Let’s make tax simple — and get you fully MTD-ready, without the stress.