Scheme-funded measures, guarantee commitments, materials and a split between paid surveys and installs. Here's how Making Tax Digital for Income Tax applies to damp proofing and insulation specialists, and when it starts.
MTD for Income Tax phases in by gross income before expenses. Scheme-funded work and materials passing through your accounts can lift your gross turnover.
Whether a job is paid by a customer, a lead installer or a funding scheme, the payment is gross income for the threshold. Recording the materials against the job keeps your tax based on the real margin.
When you're in scope, your annual Self Assessment return is replaced by four short quarterly updates and a year-end final declaration, all through recognised software.
Keep survey and install income separate in your records so each quarter is clear and accurate.
ECO and similar measures are income however they're funded. Record the payment and the materials against the job.
A paid survey and the install that follows are both income. Keep them separate so your quarters are clear.
A guarantee is a future commitment. There's nothing to record until you spend money honouring it, then it's an expense.
Damp-proofing and insulation materials are deductible. Snap the receipts so your expense total stays complete.
Different payers and a survey-to-install pipeline mean records that need to stay clear. Clear Books keeps it organised and gives HMRC exactly what MTD needs.
Record funded work, surveys and installs as you go, watch your gross against the thresholds, and be ready to submit when your wave lands.
