Do you need to use MTD ITSA?
MTD ITSA applies to sole traders and landlords with qualifying income above specific thresholds. For scaffolders, this means the total income from your scaffolding business before you deduct any expenses.
The threshold is tested as MORE than the figure. If your qualifying income was exactly £50,000 in 2024-25, you are not over the threshold and do not need to use MTD ITSA for 2026-27.
If your income was over £50,000 in 2024-25, you must use MTD ITSA for the 2026-27 tax year. If it was over £30,000 in 2025-26, you must use it from 6 April 2027. If it was over £20,000 in 2026-27, you must use it from 6 April 2028.
Qualifying income is calculated from the tax return you submitted in the previous tax year. It includes self-employment income and property income combined. It does not include employment income through PAYE, dividends, pensions, or one-off transactions in UK land.
| Tax year tested | Threshold | MTD ITSA starts |
|---|---|---|
| 2024-25 | Over £50,000 | 6 April 2026 |
| 2025-26 | Over £30,000 | 6 April 2027 |
| 2026-27 | Over £20,000 | 6 April 2028 |
Handling CIS deductions and equipment hire
Many scaffolders work under the Construction Industry Scheme (CIS). If you are a subcontractor, your contractor deducts money from your payments before sending them to you. You still need to record this income and the deductions in your digital records.
If you hire scaffolding equipment, the hire costs are business expenses. You must keep digital records of these invoices and payments. Under the cash basis, which is the default method, you record expenses when the bill is paid.
Your software must store these records digitally. You cannot keep paper records and then manually type them into a spreadsheet later, as this breaks the digital link requirement.
Quarterly updates and deadlines
MTD ITSA requires four quarterly updates each year. These are summaries of your income and expenses by category, not full tax returns. You must send an update even if you had no income or expenses in that period.
The deadlines are fixed. You can send the update from the end of the period up to the deadline, or up to 10 days before the period ends if you expect no further transactions.
After each update, you can see an estimate of your tax bill in your software or in HMRC online services. The final tax return is submitted after the tax year ends, and tax is paid by 31 January.
| Period ends | Update due by |
|---|---|
| 5 July | 7 August |
| 5 October | 7 November |
| 5 January | 7 February |
| 5 April | 7 May |
Penalties and points
You get one penalty point for each missed submission deadline. If you reach 4 points, you face a £200 penalty, and a further £200 for each subsequent missed deadline. VAT penalty points are counted separately.
For the 2026-27 tax year, there are no penalty points for missing a quarterly update deadline. However, you still must send the updates and keep digital records. Penalty points still apply to the tax return deadline.
If you are below the points threshold, points are removed automatically 24 months after the missed deadline. If you are at the threshold, you need 12 months of on-time updates and returns to clear them.
Signing up and software
You must be registered for Self Assessment and have submitted a tax return in the last 2 years. You sign up for each income source if you have more than one. From September 2026, HMRC will sign up anyone who needs it for 2026-27 and has not done so themselves.
HMRC does not provide software. You need compatible software that creates and stores digital records, works with your accounting period, and sends quarterly updates. TradeKit is MTD ready - recognised by HMRC (reference D4K6ZS).
You authorise the software to connect to HMRC, and you must repeat this authorisation every 18 months without repeating the identity check.