Are you in? It’s your takings, not your profit
Add up everything customers paid you in the 2025/26 tax year – labour, materials you charged on, call-out fees and work for landlords or agents – before taking off materials or anything else. If you also do subcontract work for a builder, include the gross amount before any CIS deduction. If that total (plus any rent from property you let) is over £30,000, MTD applies from 6 April 2027. Over £50,000 and you have been in since April 2026.
Over £50,000
Over £30,000
Over £20,000
planned
Your work in accountant language
What actually happens in your working life, what your accountant and HMRC call it, and what to do about it.
| What happens | Accountant calls it | What you do |
|---|---|---|
| A homeowner pays you for a morning of odd jobs plus the parts | Sales / turnover (labour and materials together) | Record the full amount paid, not just your labour. |
| You pick up screws, sealant and a new tap at the trade counter | Allowable expense – materials | Keep the receipt or trade account statement. |
| A letting agent pays your invoice 30 days later | Turnover when received (cash basis) | Record it on the day the money lands. |
| A builder pays you for labour and deducts 20% CIS | Gross turnover + tax already paid | Only if you subcontract for builders. Record the gross amount as income and keep the CIS statement – the deduction is set against your tax bill. |
| A job-lead website charges you for a lead or membership | Allowable expense – advertising | Keep the invoice. |
| You buy a new drill or mitre saw | Equipment – deductible in the year you buy it (cash basis) | Keep the receipt; it comes off your profit this year. |
| You take money out to pay your own bills | Drawings – not an expense | Fine to do, but it doesn’t reduce your tax. |
| Every three months | Quarterly update | Your software sends HMRC your income and expense totals. |
| After 5 April | Final declaration | Confirm the year’s figures; tax is worked out and due by 31 January. |
What can a handyman claim?
✓ Usually allowable
- Materials and parts you buy for customers’ jobs
- Power tools, hand tools, ladders and their repairs
- Consumables – screws, fixings, sealant, sandpaper, blades, dust sheets
- Van running costs – fuel, insurance, MOT, repairs – or business mileage instead
- Waste disposal and tip charges
- Work boots, knee pads, safety glasses and other protective kit
- Public liability and tool insurance
- Job-lead website and directory fees, website and advertising
- Business share of your phone and accounting software
✗ Not allowable
- Everyday clothes
- Tools and materials for your own house
- Private use of the van
- Parking and speeding fines
- Money you take out for yourself (drawings)
Rules that matter for handymen
Materials count as takings
If you buy materials and charge them on, the full invoice is income and the materials are an expense. If the customer buys the materials themselves, neither appears in your books – which keeps your turnover lower.
CIS – only if you work for builders
Most handyman jobs for homeowners are outside the Construction Industry Scheme. But if you subcontract for a builder or contractor, they may deduct 20% (or 30% if you are not registered) from the labour part of what they pay you. Record the gross amount as income; the deductions count as tax already paid and often lead to a refund in your final declaration.
Small jobs, cash payments
Odd jobs are often paid in cash. They are income like any other and count towards your MTD threshold. Recording each job on the day, with what you charged and what you spent, is the easiest way to keep on top of it.
Worked example
Gary does odd jobs for homeowners and letting agents in Northampton (illustrative example)
| Takings (turnover) | £39,800 |
| less Materials charged to customers | −£6,900 |
| less Van costs (fuel, insurance, repairs – business share) | −£4,200 |
| less Tools and equipment | −£1,400 |
| less Consumables and fixings | −£950 |
| less Job-lead website and advertising | −£1,100 |
| less Insurance, phone and tip charges | −£760 |
| Profit | £24,490 |
| Income tax (estimate) | £2,384 |
| Class 4 National Insurance (estimate) | £715 |
| Total tax for the year | £3,099 |
| Put aside each month | £258 |
Estimate for 2026/27 using England, Wales & NI rates, assuming no other income. Scotland has different income tax bands.
What a quarterly update looks like
A typical quarter for a handyman: check every invoice and cash job is recorded, download your trade counter statements, add van receipts and any job-lead fees, and file CIS statements if you did builder work – then press submit in your software, or let your accountant do it. Logging each job on your phone the same day makes the quarter a ten-minute job.
| Quarter | Period | Submit by |
|---|---|---|
| Q1 | 6 Apr – 5 Jul | 7 Aug |
| Q2 | 6 Jul – 5 Oct | 7 Nov |
| Q3 | 6 Oct – 5 Jan | 7 Feb |
| Q4 | 6 Jan – 5 Apr | 7 May |
| Final declaration | The whole tax year | 31 Jan following |
Quarterly updates are summaries – they don’t change when you pay. Tax is still due by 31 January (plus payments on account on 31 January and 31 July if they apply to you).
What will an accountant cost?
Typical monthly fees under MTD for Income Tax for: Sole trader, one business.
| Option | What you get | Per month |
|---|---|---|
| You do it yourself | MTD-compatible software. You keep the records and send the updates. | £0–£15up to £180 a year |
| Accountant files for you | You keep records in an app; they check them, send the 4 quarterly updates and the final declaration. | £30–£60about £360–£720 a year |
| Full service | They do the bookkeeping too – you share receipts and bank feeds, they handle the rest. | £60–£120about £720–£1,440 a year |
What pushes the price up: lots of transactions every month, or more than one income stream; records kept on paper rather than in an app; being VAT-registered; catching up on missed updates or late returns.
What a fixed-fee quote should include
- All 4 quarterly updates and the final declaration (your tax return)
- The MTD software licence – or whether you pay for it separately
- Whether they do the bookkeeping or only check what you’ve recorded
- A reminder before each deadline and an estimate of the tax to put aside
- Whether VAT (20%) is added on top – not every practice charges it
Accountancy fees for your business are an allowable expense, so they reduce your tax bill.
Indicative ranges from published UK price lists, checked October 2026. Not a quote – your fee depends on how many transactions you have, how tidy your records are and where you live.
Questions handymen ask
Do I have to include materials in my turnover?
Yes, if you buy them and charge them on. The cost of the materials is then an expense, so your profit is the same – but your turnover is higher.
Does CIS apply to me?
Usually not for work directly for homeowners. It can apply if you subcontract on construction work for a builder or contractor – they will tell you if they’re making deductions.
Can I claim my van?
Yes, for business use. Either use the mileage rate or claim actual costs including, under the cash basis, the purchase price – but not both for the same vehicle.
I’m employed in the week and do handyman jobs at weekends. Does MTD apply?
Your wages don’t count. Your handyman takings do – over £1,000 a year and you need to register for Self Assessment, and above the MTD threshold (with any rental income), MTD applies.
Sources
- Find out if and when you need to use Making Tax Digital for Income Tax – GOV.UK
- Work out your qualifying income for Making Tax Digital for Income Tax – GOV.UK
- Send quarterly updates using Making Tax Digital for Income Tax – GOV.UK
- Find software that works with Making Tax Digital for Income Tax – GOV.UK
- Penalties for Making Tax Digital for Income Tax – GOV.UK
This guide is general information about HMRC’s Making Tax Digital rules as of 26 October 2026, not tax advice. MTD Match is an independent introduction service and is not affiliated with HMRC. Check gov.uk or speak to an accountant about your own situation.