Making Tax Digital for plumbers, heating engineers and electricians

Most plumbing, heating and electrical work is done for the people who live in the house: a boiler swap, a new consumer unit, a leak at nine at night. Those customers are not contractors, so the Construction Industry Scheme does not apply and you are paid the full amount. If you also do second-fix work for a builder, that part may come with CIS deductions, and our guide for builders and CIS subcontractors covers it.

What Making Tax Digital changes is the rhythm. Instead of sorting a year’s invoices and merchant receipts in January, you keep them in software as you go and send a short summary to HMRC four times a year. For a trade where a single job can involve a deposit, a merchant run, a card payment and a warranty call-back, that habit matters more than most.

Sole traders now use the cash basis unless they choose otherwise. Income counts when it reaches you, and costs count when you pay them. For a heating engineer that means a deposit for a job booked weeks ahead goes in the quarter you receive it, and the balance goes in the quarter the customer pays it.

The same applies to bigger jobs paid in stages, such as a rewire or a bathroom refit. Each stage payment is recorded when it lands. The parts are recorded when you pay the merchant, which may be a different quarter from the one in which they go in.

Every trade van carries stock: compression fittings, cable, sockets, valves, a spare pump. On the cash basis you claim those parts when you pay for them, rather than tracking how many are left on the shelf at the end of the year. That keeps things simple, but it means a big merchant order just before a quarter ends lowers that quarter’s profit and lifts the next one.

That is fine, as long as you know it is happening. The quarterly updates are not a tax bill in themselves; the tax is worked out on the whole year. The figures you send simply show HMRC, and you, how the year is going, and the tax calculator turns them into how much to put aside.

You can claim the van at the flat simplified expenses rate of 55p a mile for the first 10,000 business miles in 2026 to 2027 and 25p after that, or claim the actual running costs plus capital allowances on the van. Once a vehicle is on the flat rate it stays on it for as long as you use it in the business.

Either way, Making Tax Digital wants the figures recorded through the year, not reconstructed at the end. A mileage app, or a log filled in at the end of each day, is far easier than going back through a year of jobs. Travel from job to job is business mileage, and the mileage calculator shows which method suits your van.

Emergency callouts are often paid on the spot, sometimes in cash, sometimes late at night. Record them that evening or the next morning, while you still remember the address and the amount. A missing callout is income HMRC can find later through your bank, and it looks worse than it is.

Warranty and manufacturer work, such as boiler repairs paid for by a manufacturer’s scheme, is income from whoever pays you, recorded when it arrives. Work for letting agents, like gas safety certificates and electrical condition reports, is often invoiced and paid weeks later, so keep a list of what is owed and record each payment when it comes in.

A good accountant for a trade will set up your categories once, link your bank and card reader to the software, and check each quarter that nothing is missing. Ask whether they already look after plumbers or electricians, whether software is included in the monthly fee, and whether they will tell you when you are getting close to the VAT threshold.

If the phones are the problem rather than the paperwork, our page on AI receptionists for plumbers covers taking calls while you are on a job. For the wider rules, see Making Tax Digital for the self-employed and MTD software, or use the checker to see your start date.