Tax, CIS and Making Tax Digital for self-employed groundworkers

When Making Tax Digital starts for groundworkers

It depends on your qualifying income, not your trade. Qualifying income is the total of self-employment and property income before expenses (turnover), not profit.

Once you’re in, you send HMRC a quarterly update by 7 August, 7 November, 7 February and 7 May, then a tax return after the year ends. MTD for Income Tax does not change how tax is paid or the payment due dates.

Check your own start date and what to sort first. It’s free and takes a minute.

CIS for groundworkers

The law names site clearance, earth-moving, excavation, foundations and roadways as construction work, and adds sewers, pipelines and land drainage, so most groundwork for a contractor is inside CIS. Moving materials around a site is covered, but delivering them, and carting spoil away, is not. Drains are split: laying them is covered, but repairing a building’s own drains on their own is not. Digging trial pits or boring soil samples for a surveyor counts as part of the survey, which is outside CIS. If one contract mixes covered and uncovered work, every payment under it is covered.

When CIS applies, a contractor deducts 20% if you’re registered for CIS, 30% if you’re not, and nothing if you have gross payment status. To work out a CIS deduction, the contractor starts with the gross invoice and takes away what the subcontractor paid for VAT, consumable stores, fuel (except for travelling), plant hire, manufacturing or prefabricating materials, and materials; the CIS rate is then deducted from the amount left.

Before you join Making Tax Digital, over-deducted CIS is claimed back through your Self Assessment tax return. Once you are in Making Tax Digital, HMRC adds your CIS deductions to your tax return, and any refund is requested separately through HMRC online services. Either way, the sooner after 5 April the return is filed, the sooner HMRC can repay you.

Estimate your CIS refund

Free, and it runs in your browser: add your van or mileage, tools and phone, for 2025-26 and 2026-27.

Costs groundworkers usually claim

The test for every cost is whether it was for your business. If something is partly personal, only the business part counts.

Your van, tools and kit

Groundworkers hire more plant than most trades. A digger, dumper or roller hired from another firm for a CIS job can come off your invoice as materials, with the fuel it uses, before the deduction is worked out. A machine you own, or are buying on hire purchase, gets no such allowance, though its fuel on the job still does. Plant and tools you buy to keep are business equipment, and so is the van or tipper. A double cab pickup bought from 6 April 2025 is now usually treated as a car, not a van, which changes how its cost is claimed. Travel from home to a run of temporary sites can usually be claimed, but months on one site start to look like commuting, so keep a log of where you worked.

From 2024-25 the cash basis is the default for sole traders and partnerships without corporate partners, with no turnover limit; traditional (accruals) accounting is an opt-out. Under the cash basis, the cost of equipment bought to keep and use in the business, such as machinery, computers and vans, is claimed as a normal allowable expense rather than a capital allowance. Cars are different: they go through capital allowances.

Simplified expenses for cars and goods vehicles (vans) from 6 April 2026: 55p a mile for the first 10,000 business miles, then 25p; motorcycles 24p. Once used for a vehicle you must keep using it for that vehicle, and it cannot be used for a vehicle already claimed through capital allowances.