Heavy materials, plant hire, weather-dependent work and deposits on big domestic jobs. Here's how Making Tax Digital for Income Tax applies to driveway and paving specialists, and exactly when it starts.
MTD for Income Tax phases in by gross income before expenses. Heavy materials and plant hire pass through your accounts, so your gross turnover can be well above your profit.
Most of a driveway job is materials and plant you paid for, but the whole invoice counts as gross income for the threshold. Recording your purchases and hire as expenses 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.
Log materials and hire against the job so a big drive shows the real margin, not just the turnover.
Paving and aggregate you buy count as income and expense. Record both so you're taxed on the real margin.
Diggers, compactors and dumpers hired for a job are deductible. Snap the hire invoices so they land against the right job.
Deposits fund the materials; cash jobs still count. Record both so your quarter is complete and accurate.
A washed-out fortnight just means a lower quarter. The year reconciles at the final declaration.
When materials and plant dominate a job, the margin matters. Clear Books keeps income and costs matched and gives HMRC exactly what MTD needs, whenever you're in scope.
Record materials, hire and deposits as you go, watch your gross against the thresholds, and be ready to submit when your wave lands.
