What is it?
Making Tax Digital (MTD) is a UK government initiative that requires individuals and businesses to keep digital records and submit tax information to HMRC using compatible software, aiming to improve accuracy and efficiency. It already applies to many VAT-registered businesses and is being extended to include Income Tax Self Assessment, encouraging more frequent, real-time reporting. While it involves moving away from manual processes, MTD can help streamline bookkeeping, reduce errors, and give businesses better visibility over their finances.
If you’re a self-employed individual, CIS subcontractor or landlord earning over £50,000 annually, this applies to you.
Why It Matters
As a self-employed individual, from April 2026 HMRC will expect you to:
Record your income and expenses digitally using MTD-compliant software
Submit a quarterly return every quarter not just once a year
Keep accurate records
This marks a big shift from the current system where many self-employed workers rely on yearly submissions and paper records.
How Will This Affect CIS Tax Returns?
Here’s how your CIS work will be impacted:
You will be required to submit a quarterly return even if you have no income
CIS statements will need to be matched with your expense records in real time
You’ll need to use compliant software to keep records of deductions, expenses (including travel) and materials
You’ll still claim back your tax rebate but now through a more structured digital process.
How Kanopi will help you
We specialise in working with contractors in and out of CIS, so our accountants can make sure you comply with the legislation by:
Providing you with discounted access to MTD approved software (if you don’t already have it)
Helping you prepare and submit your quarterly returns
Give you unlimited help and advice
