Why Making Tax Digital Will Catch Out Some Roofers on CIS

Industry News

From 6 April 2027, Making Tax Digital for Income Tax reaches self-employed people whose income was over £30,000 in the 2025/26 tax year.

For the roofing sector, it is likely to trip up far more people than the annual income figure suggests, because of the way HMRC measures that £30,000.

Gross Income Counts

HMRC looks at your income before any expenses and before any CIS tax is taken off. It is not your profit, and it is not what lands in your bank.

Take a subbie roofer who invoiced £38,000 in the year to 5 April 2026. Of that, £11,000 was materials. The main contractor took 20% CIS tax off the £27,000 of labour, which is £5,400. After paying for materials and losing the CIS tax, about £21,600 was left in the roofer’s pocket. For Making Tax Digital, though, this is a £38,000 business, so it is included under the scheme from April 2027.

The Changes

Roofers who are within the scheme will need to keep their records digitally and send HMRC a short update every quarter, using software that works with Making Tax Digital.

The first update for 2027/28 is due by 7 August 2027. The yearly tax return still has to be done by 31 January, and the dates you pay your tax do not change.

The Budget confirmed that people joining in April 2027 will not get penalty points for late quarterly updates in their first year. The updates still have to be sent, so it is a soft landing rather than a free pass.

This round only covers sole traders. Roofers who trade through a limited company, or in a partnership, are not affected yet.

The Good News

Many roofers on CIS overpay tax during the year, because 20% comes off the labour before any allowance or expenses are taken into account. The overpayment comes back through the tax return.

Say our roofer also spent £4,000 on their van, fuel, tools and phone. Their profit for 2025/26 is £23,000. With no other income, the Income Tax and Class 4 National Insurance on that comes to about £2,712. With £5,400 already taken under CIS, they are owed around £2,688 back. The exact figure depends on the roofer’s own allowances and any other income.

That refund is claimed on the 2025/26 tax return, which is due by 31 January 2027. Good records make it quicker to claim and easier to prove.

To Do Before April 2027

1. Add up the invoices you issued for the financial year 2025/26, including materials and before CIS, plus any rental income you receive. Over £30,000 means you are in from April 2027.

2. Keep every monthly CIS statement from your contractors. They show the tax already paid and back up your refund.

3. Pick software that works with Making Tax Digital and start using it before April, so the first quarter is not your first go.

4. Use a separate bank account for the business.

5. Photograph receipts for materials, tools, fuel and workwear as you go, rather than keeping them in a carrier bag until January.

For roofing firms that use subcontractors, expect questions on this. Sending accurate monthly CIS statements on time is the most useful thing you can do for your subbies.

TaxTune has a free CIS refund calculator here.