13th May 2026 | Hudson Contract
The government’s Making Tax Digital for Income Tax reporting regime has gone live – hitting self-employed tradespeople with “yet another administrative burden” in a tough economic climate.
Sole traders and landlords who earned more than £50,000 during the 2024-25 tax year must now use HMRC-compatible software to report their income and expenses every three months with the first reports due by August 7.
Under the new system, they must create, maintain, and correct digital records of their self-employment and property income and expenses, and submit quarterly updates to HMRC.
They are also required to file their tax return and pay any tax due by January 31 of the following year.
This is just the beginning: from next April, those earning over £30,000 must comply with the rules, and from 2028 it will apply to those earning over £20,000, meaning the vast majority of subbies will eventually be caught.
Hudson senior accountant Marc Chapman FCCA MAAT said: “The imposition of Making Tax Digital is yet another administrative burden and piles extra pressure on highly skilled self-employed tradespeople who are the lifeblood of the construction industry.
“It is unclear what HMRC thinks it will achieve, especially when it gets down to people earning 20 grand a year as any over-claim on expenses will be tiny compared to the legal accounting manoeuvres deployed by large firms or the tax savings made when Deputy Prime Ministers sell their own houses into family trusts.
“When it comes to solutions, it’s like the Wild West out there with all the conflicting messages about how to deal with MTD. We’re getting lots of calls from construction firms and subbies who are being told to set up limited companies and that MTD will quadruple their accounts costs.
“To cut through all of that, we’ve compared the market and have partnered with Grenfell James, a specialist accountancy firm, to provide a user-friendly tool that costs as little as £10 per month plus VAT.”
For more information, see our Making Tax Digital: What You Need to Know page with our explainer videos.
