Are you in? It’s your takings, not your profit
Add up every invoice from the 2025/26 tax year – domestic jobs, certificates, site work, and the cable, consumer units and fittings you supplied – before CIS deductions and before costs. If that total (plus any rent from property you let) is over £30,000, MTD applies from 6 April 2027. Over £50,000 and you have been in since April 2026.
Over £50,000
Over £30,000
Over £20,000
planned
Your work in accountant language
What actually happens in your working life, what your accountant and HMRC call it, and what to do about it.
| What happens | Accountant calls it | What you do |
|---|---|---|
| You invoice a contractor £1,500 labour for second fix | Gross turnover | Record the full £1,500 as income. |
| The contractor pays £1,200 and deducts £300 under CIS | CIS deduction – tax already paid | Record the £300 as tax deducted, using the monthly CIS statement. |
| At the end of the year | CIS set against your tax bill | Your total deductions are taken off the tax due; if more was deducted than you owe, you get a refund. |
| A landlord pays you for an EICR | Turnover | Record it in full. No CIS on private work. |
| You buy a consumer unit and cable from the wholesaler | Allowable expense – materials | Keep the invoice from your trade account. |
| You buy a new multifunction tester | Equipment – deductible in the year you buy it (cash basis) | Keep the receipt and calibration certificate. |
| You pay your competent person scheme fee | Allowable expense – registration | Keep the renewal confirmation. |
| You transfer money to your personal account | Drawings – not an expense | It doesn’t reduce your tax. |
| Every three months / after 5 April | Quarterly update / final declaration | Send quarterly totals; confirm the year by 31 January. |
What can a electrician claim?
✓ Usually allowable
- Cable, consumer units, accessories, fixings and other materials used on jobs
- Multifunction tester, calibration and other test equipment
- Hand and power tools, and repairs
- Competent person scheme membership (for example NICEIC or NAPIT)
- Courses to stay current, such as wiring regulations updates
- Van running costs or 45p a mile – one method per vehicle
- Public liability and professional indemnity insurance
- Certificate software and job management apps
- Protective clothing and boots
- Business share of your phone bill
✗ Not allowable
- The CIS tax deducted from your pay
- A course to qualify in a brand-new trade
- Everyday clothes
- Travel to a site you attend every day for over 24 months
- Parking fines
- Money you take out for yourself (drawings)
Rules that matter for electricians
How CIS works for sparkies
Contractors deduct 20% from the labour part of your payment if you are CIS-registered, 30% if not. Materials you supply and itemise are not deducted from. In your records the invoice goes in at the gross amount, and the deduction is logged as tax already paid – it reduces the tax you owe at the final declaration.
Show materials on your invoices
If you supply materials on CIS jobs, list them separately on the invoice. Otherwise the contractor may deduct 20% from the whole amount, and you wait until the end of the year to get the excess back.
Training: update or new skill?
Courses that keep your existing skills current – like a wiring regulations update – are usually allowable. Training to add a substantially new skill can be treated differently. If in doubt, ask whoever does your accounts.
Worked example
Callum, a domestic and CIS electrician in Bristol (illustrative example)
| Takings (turnover) | £46,200 |
| less Cable, accessories and materials | −£7,800 |
| less Van fuel, insurance and servicing | −£4,300 |
| less Test equipment, tools and calibration | −£1,200 |
| less Scheme membership and training | −£750 |
| less Insurance, certificate software and phone | −£1,250 |
| Profit | £30,900 |
| Income tax (estimate) | £3,666 |
| Class 4 National Insurance (estimate) | £1,100 |
| Total tax for the year | £4,766 |
| Put aside each month | £397 |
Estimate for 2026/27 using England, Wales & NI rates, assuming no other income. Scotland has different income tax bands.
What a quarterly update looks like
A typical quarter for an electrician: export invoices from your certificate or job app, add the CIS statements from each contractor, match wholesaler invoices to jobs, log mileage – then press submit, or pass it to your accountant. A monthly ten-minute habit beats sorting a glovebox of receipts the week before 7 August.
| Quarter | Period | Submit by |
|---|---|---|
| Q1 | 6 Apr – 5 Jul | 7 Aug |
| Q2 | 6 Jul – 5 Oct | 7 Nov |
| Q3 | 6 Oct – 5 Jan | 7 Feb |
| Q4 | 6 Jan – 5 Apr | 7 May |
| Final declaration | The whole tax year | 31 Jan following |
Quarterly updates are summaries – they don’t change when you pay. Tax is still due by 31 January (plus payments on account on 31 January and 31 July if they apply to you).
What will an accountant cost?
Typical monthly fees under MTD for Income Tax for: Construction trades (often CIS).
| Option | What you get | Per month |
|---|---|---|
| You do it yourself | MTD-compatible software. You keep the records and send the updates. | £0–£15up to £180 a year |
| Accountant files for you | You keep records in an app; they check them, send the 4 quarterly updates and the final declaration. | £35–£70about £420–£840 a year |
| Full service | They do the bookkeeping too – you share receipts and bank feeds, they handle the rest. | £70–£130about £840–£1,560 a year |
What pushes the price up: matching CIS statements and claiming back tax that was over-deducted; records kept on paper rather than in an app; being VAT-registered; catching up on missed updates or late returns.
What a fixed-fee quote should include
- All 4 quarterly updates and the final declaration (your tax return)
- The MTD software licence – or whether you pay for it separately
- Whether they do the bookkeeping or only check what you’ve recorded
- A reminder before each deadline and an estimate of the tax to put aside
- Whether VAT (20%) is added on top – not every practice charges it
Accountancy fees for your business are an allowable expense, so they reduce your tax bill.
Indicative ranges from published UK price lists, checked October 2026. Not a quote – your fee depends on how many transactions you have, how tidy your records are and where you live.
Questions electricians ask
My CIS deductions usually come back as a refund. Does MTD change that?
No. The deductions are still set off at the final declaration, which replaces the old tax return. The refund still comes after the year end.
Do EICRs and PAT testing count towards MTD?
Yes. All your self-employed income counts, including testing and certificates.
Can I claim my NICEIC or NAPIT fees?
Yes, membership needed for your work is an allowable expense.
I’m employed by day and do private jobs at weekends. Am I in?
Your wages don’t count. Your weekend invoices do – if they (plus any rent) go above the threshold, MTD applies.
Sources
- Find out if and when you need to use Making Tax Digital for Income Tax – GOV.UK
- Work out your qualifying income for Making Tax Digital for Income Tax – GOV.UK
- Send quarterly updates using Making Tax Digital for Income Tax – GOV.UK
- Find software that works with Making Tax Digital for Income Tax – GOV.UK
- Penalties for Making Tax Digital for Income Tax – GOV.UK
This guide is general information about HMRC’s Making Tax Digital rules as of 26 October 2026, not tax advice. MTD Match is an independent introduction service and is not affiliated with HMRC. Check gov.uk or speak to an accountant about your own situation.