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

When Making Tax Digital starts for labourers

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 labourers

HMRC says almost anything done on a building site in connection with the building work is likely to be construction, so general labouring on site is usually inside CIS. That includes site clearance, digging out, moving materials around the site and the clean inside a building on completion. Driving materials to site, carting spoil away and repeat cleaning after the completion clean, such as show houses awaiting sale, are outside it. CIS only applies if you are self-employed under that job’s terms. If they make you an employee, or an agency pays you as an employee under the agency rules, tax goes through PAYE instead.

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 labourers 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

Most labourers own little more than hand tools and protective kit, because the contractor usually supplies the plant and materials. HMRC weighs that when it looks at employment status, so supplying substantial equipment of your own points towards self-employment. Travel is often the biggest cost. Going from home to a run of temporary sites is business travel. But if you get yourself to a yard or meeting point and the contractor takes you on to site from there, HMRC treats that point as your one place of work, so the trip there is not usually claimable.

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.