Are you in? It’s your takings, not your profit
Add up everything customers and contractors paid you in the 2025/26 tax year – call-outs, installs, servicing and the parts and boilers on your invoices – before taking off what you paid the merchant, and before any CIS deduction. 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 |
|---|---|---|
| A customer pays £3,200 for a new combi boiler, fitted | Turnover (labour and materials together) | Record the full £3,200 as income – not just your labour. |
| You collect the boiler and fittings from the merchant | Allowable expense – materials and parts | Keep the invoice; match it to the job if you can. |
| A site contractor pays you for first fix, minus 20% | Gross turnover + CIS deduction | Record the gross invoice as income and the deduction as tax already paid. |
| You pay your annual Gas Safe registration | Allowable expense – registration fees | Keep the confirmation email. |
| You buy a new flue gas analyser or press-fit tool | Equipment – deductible in the year you buy it (cash basis) | Keep the receipt; note the date paid. |
| You drive to a job across town | Vehicle costs or mileage | Log the trip, or keep fuel and van receipts if you claim actual costs. |
| You move money to your personal account | Drawings – not an expense | Fine to do, but it doesn’t reduce your tax. |
| Every three months | Quarterly update | Your software sends HMRC your income and expense totals. |
| After 5 April | Final declaration | Confirm the year; any CIS deductions are set off and tax is due by 31 January. |
What can a plumber claim?
✓ Usually allowable
- Boilers, radiators, cylinders, pipe, fittings and parts used on jobs
- Gas Safe registration and ACS reassessments
- Tools and test equipment – flue gas analyser, pipe benders, press tools, drain cameras
- Van running costs or 45p a mile – one method per vehicle
- Public liability and tools-in-van insurance
- Manufacturer training and courses that keep your current skills up to date
- Workwear, boots and protective kit
- Job management or invoicing software and card reader fees
- Business share of your phone bill
- Waste disposal for old boilers and bathroom suites
✗ Not allowable
- Training for a completely new skill or trade (for example, retraining as an electrician)
- CIS tax deducted from your pay
- Everyday clothes
- Parking fines and speeding penalties
- Lunch and drinks on the road
- Money you take out for yourself (drawings)
Rules that matter for plumbers
Parts pass through your turnover
When you supply a boiler or bathroom suite, the full price the customer pays is income and the cost from the merchant is an expense. Your profit is the same either way, but your turnover – which decides MTD – includes the parts.
Customer-supplied parts
If the customer buys the boiler themselves and pays you only to fit it, only your labour is your income. Make sure your invoice shows this clearly.
CIS on some jobs, not others
Work for builders and developers on construction sites is usually under CIS: 20% is taken off the labour part. Repairs and installs for homeowners are not. Many plumbers have both, so keep CIS jobs clearly marked in your records.
Manufacturer cashback and warranties
If a boiler maker pays you a reward or cashback for registering installs, that is usually part of your business income too.
Worked example
Priya, a Gas Safe heating engineer in Leicester (illustrative example)
| Takings (turnover) | £48,500 |
| less Boilers, parts and materials | −£13,200 |
| less Van fuel, insurance and servicing | −£4,100 |
| less Tools and test equipment | −£1,400 |
| less Gas Safe, ACS and training | −£900 |
| less Insurance, software and phone | −£1,300 |
| Profit | £27,600 |
| Income tax (estimate) | £3,006 |
| Class 4 National Insurance (estimate) | £902 |
| Total tax for the year | £3,908 |
| Put aside each month | £326 |
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 a plumber: pull your invoices from your job app, check every boiler and parts receipt from the merchant is matched, add any CIS statements, log mileage or fuel – then submit through your software, or let your accountant do it. If your merchant account gives you a monthly statement, it makes the materials side quick.
| 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 plumbers ask
I only make a few hundred on a boiler swap. Why does the whole price count?
Because MTD is based on turnover – everything the customer pays you – not profit. The boiler cost comes off as an expense when your profit is worked out.
Can I claim my Gas Safe fees?
Yes. Registration and the ACS reassessments that keep you qualified for your current work are allowable expenses.
Some jobs are CIS and some aren’t. How do I record that?
Record all invoices at the gross amount as income. For CIS jobs, also record the tax deducted from each payment, using the contractor’s monthly statement.
Do I need to keep receipts for every fitting?
Keep a record of every purchase. A trade account statement listing each item is usually fine, and photos of receipts in your app count as digital records.
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.