There is no single best product, and HMRC does not recommend any. On 16 October 2026, 26 products on HMRC's finder were ready now for sole traders, CIS deductions on the tax return and Making Tax Digital for VAT.
Making Tax Digital for Income Tax (MTD) means keeping digital records, sending HMRC an update every quarter and filing your tax return through software. If you wire new builds for a contractor one week and fit a consumer unit for a homeowner the next, each job follows different tax rules, and your software has to cope with both.
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Site work and home work follow different rules
CIS. Under the Construction Industry Scheme (CIS), a contractor is a business that pays subcontractors for construction work, and installing systems of lighting and power supply is listed as construction work. HMRC's CIS 340 guide says repairing, servicing or extending an existing system is not included on its own, nor are security systems, and HMRC's manual puts warning-only fire alarms outside too. One contract mixing included and excluded work brings all of it within CIS. CIS 340 also says private householders are not counted as contractors. If a builder pays you for a householder's job, though, the builder must operate CIS on your payments. More in does CIS apply to electricians.
Materials. A contractor works out your CIS deduction after taking away VAT and the materials you paid for directly. GOV.UK says they can ask for evidence, such as receipts, and estimate the cost if you have none.
VAT. If you are VAT registered, the domestic reverse charge applies to standard and reduced rate building services reported within CIS, where your customer is registered for VAT and CIS. HMRC's technical guide says it does not apply to a private domestic customer or to a customer who has told you in writing that they are an end user or an intermediary supplier. And Making Tax Digital for VAT already requires every VAT-registered business to keep digital records and file VAT returns using software.
| Job | CIS deduction from your pay? | If you are VAT registered | What your software needs to do |
|---|---|---|---|
| Installing a complete system for a builder registered for VAT and CIS | Yes, unless you have gross payment status | Reverse charge on standard or reduced rate work, unless they tell you in writing they are an end user or intermediary supplier | Record gross pay and CIS deducted; issue a reverse charge invoice |
| The same job paid direct by a homeowner | No | Normal VAT | Issue an ordinary VAT invoice |
| Materials you supply and fit on a CIS job | Taken off before the deduction is worked out | Usually reverse charge on the whole invoice, materials included | Keep receipts against the job |
| Repairing or servicing an existing system, as a job on its own | No, repairs and servicing of a system are excluded | Normal VAT, in our reading, as the reverse charge list matches CIS | Issue an ordinary VAT invoice |
| Burglar alarm or security CCTV installed on its own | No, security systems are excluded | Normal VAT | Issue an ordinary VAT invoice |
What HMRC's finder showed on 16 October 2026
We read every product page on HMRC's finder for our MTD software census. These are counts of products, not companies.
| On HMRC's finder, 16 October 2026 | Products |
|---|---|
| Ready now for sole traders | 154 |
| Of the 154: CIS on the tax return ready now | 45 |
| Of the 154: Making Tax Digital for VAT ready now | 87 |
| Of the 154: both CIS and Making Tax Digital for VAT ready now | 26 |
| Of the 26: free version listed | 7 |
| Of the 26: bridging software for spreadsheets | 19 |
| Of the 26: software that creates digital records | 18 |
Some products are both types, so the last two rows overlap. GOV.UK says free products are available for simple tax affairs, but may have limits, such as a set number of transactions. The finder lists CIS under what is needed for tax returns, so in our reading it shows a product can report CIS deductions on your return, not that it tracks your monthly statements. Its feature list has no entry for the reverse charge, so it cannot tell you whether a product issues reverse charge invoices.
What this means for you
If you are not VAT registered, the two features to check on the finder are sole trader and CIS, both ready now. That gave 45 products on 16 October 2026.
If you are VAT registered, GOV.UK asks you to check whether your VAT software also works with MTD for Income Tax, or whether your chosen software can meet your VAT needs. Or you can use two products, but GOV.UK says only one can be used for each separate submission, and they must work together.
For the reverse charge, GOV.UK says to make sure your accounting systems and software can deal with it. If your software cannot show the reverse charge amount, HMRC's technical guide says the invoice must state the rate of VAT instead, with a note that the domestic reverse charge applies and the customer must account for the VAT.
GOV.UK lists stock or raw materials as allowable expenses. With traditional accounting, equipment is claimed through capital allowances; with cash basis, items you buy and keep, other than cars, are claimed as allowable expenses. Either way, you must keep original records or copies, such as invoices, so receipt capture is worth having.
At the end of the year, GOV.UK says HMRC will add your CIS deductions to your MTD tax return, and you must check them before you submit.
Steps to choose your software
- Use the free MTD check to see when MTD starts for you.
- Sort a few months of jobs into CIS work for contractors, direct work for householders and anything else.
- On HMRC's finder, check each product shows sole trader and CIS as ready now, plus Making Tax Digital for VAT if you are registered.
- Ask the vendor whether it issues reverse charge invoices and normal VAT invoices in the same quarter.
- Check you can photograph a materials receipt and link it to a job.
- Check the vendor's own site for the price after any offer, and whether VAT is added.
- Try it with a month of real jobs, CIS statements and receipts.
- Before you submit your tax return, check the CIS deductions HMRC adds against your monthly statements.
The trades section has more guides, including MTD software for builders, which lists products ready for CIS, and the VAT reverse charge for construction.
Hold your place on the trades waitlist
We’ll email you when Trades Tax opens, with the founding offer while places last. No payment is taken.
Questions people ask
Does HMRC recommend any MTD software for electricians?
No. GOV.UK says all software listed on its finder has been through HMRC's recognition process, and that HMRC does not recommend any product or software provider.
Do I need CIS in my software if I mostly work for homeowners?
Only if some of your work is for contractors. HMRC's CIS 340 guide says private householders are not counted as contractors. But if a builder pays you for work on a householder's job, the builder must operate CIS on your payments.
Does the reverse charge apply when I work for a homeowner?
No. HMRC's technical guide says the reverse charge does not apply to services for a private domestic customer, because they will not be VAT registered. If you are VAT registered, you charge VAT in the normal way.
Does the reverse charge apply to the materials on a CIS job?
Usually yes. HMRC's technical guide says goods supplied with construction services are a single supply for VAT, and the reverse charge applies to the full value of the invoice. There is a 5% disregard: if the reverse charge services are 5% or less of the whole contract value, and you and the customer agree this from the start, normal VAT rules can apply.
Can I use one product for VAT and another for Income Tax?
Yes. GOV.UK lets you use more than one product, as long as they work together and only one product is used for each separate submission. It asks VAT-registered businesses to check whether their VAT software also works with MTD for Income Tax.
Sources
- Find software for Making Tax Digital for Income Tax (GOV.UK software finder, product pages read 16 October 2026)
- Choose the right software for Making Tax Digital for Income Tax (GOV.UK)
- Construction Industry Scheme (CIS) (GOV.UK)
- CISR14160: The Scheme: construction operations: fire protection systems (HMRC manual)
- Construction Industry Scheme: a guide for contractors and subcontractors (CIS 340) (GOV.UK)
- What you must do as a CIS contractor: Make deductions and pay subcontractors (GOV.UK)
- Check when you must use the VAT domestic reverse charge for building and construction services (GOV.UK)
- VAT domestic reverse charge technical guide (GOV.UK)
- VAT Notice 700/22: Making Tax Digital for VAT (GOV.UK)
- Use Making Tax Digital for Income Tax: Submit your tax return (GOV.UK)
- Use Making Tax Digital for Income Tax: Create digital records (GOV.UK)
- Expenses if you're self-employed (GOV.UK)
This is general information to help you understand the rules. It isn't tailored to your circumstances, so check your own position before acting on it.
Righto Tax is a trading name of NJG Consultancy Ltd, registered in England and Wales, company number 16095900. Registered office: Jubilee House, East Beach, Lytham St Annes, FY8 5FT.
What happens next
- Use the free Making Tax Digital checker to see your own start date and deadlines.
- See what Righto Tax for Trades does for you, and join the waitlist.
- Questions about this page? Email hello@rightotax.co.uk.