If you’ve had a letter about Making Tax Digital (MTD) and thought, “what now?”, you’re not alone. A few clients have already phoned me, scratching their heads and wondering if they need to worry about it. So if you’re a construction business owner or property developer, here’s what you need to know. Plain and simple in Graeme speak.

What is Making Tax Digital?

MTD is the government’s way of dragging tax into the 21st century. No more scrunched up receipts in the glovebox of your van or spreadsheets that, let’s be honest, needed a bit of TLC (at best). HMRC wants everyone to keep digital records and submit tax info online using approved software.

At first glance, it sounds like a half-decent idea. Reduce mistakes, speed things up, less chance of getting stung with penalties. But as always, where HMRC are concerned, there’s a bit more to it than meets the eye.

Let’s take Brickies. They aren’t known for being good at the technical stuff. They don’t need to be. They’re good at manual labour and building walls that withstand all weather. So all this MTD talk probably makes them want to run a mile. It it wouldn’t be just the Brickies thinking this, But, honestly it’s straightforward once you’re set up. I’ve even managed to get a few of my clients to admit how easy it is compared to what they’ve been reading or hearing about.

Who does it affect (for now)?

As of April 2026, MTD for Income Tax Self Assessment kicks in for:

• Sole traders with income over £50,000
• Landlords with rental income over £50,000
• Or a combination of both totalling over £50,000

So if you’re a property developer running your own business and also renting out a flat or two, you need to look at your total income. Hit that £50k mark and you’re in.

From April 2027, the threshold drops to £30,000, so more of the smaller property developers and construction subcontractors will be included. And by 2028, it’s expected to fall to £20,000, which will rope in most CIS subcontractors.

What do you actually need to do?

If MTD applies to you, you’ll need to:

1. Keep digital records of all your income and expenses. That means no more handwritten invoices or notes on the back of your hand.
2. Submit quarterly updates to HMRC using MTD-approved software.
3. Send a final statement at year end to square everything off.

Quarterly updates sound like a pain in the a*se, and yes, it’s more admin. But done right, it can actually give you a better grip on your finances throughout the year. And that helps with planning, tax-saving, and not getting a nasty surprise from the taxman in January.

What’s the best software for MTD?

You can’t just email HMRC a spreadsheet anymore. You’ll need proper software that links directly with their systems.

If you’re with NatWest, you’re in for a winner. Their “Mettle” business account comes with FreeAgent at no extra cost. It’s MTD-compliant and perfect for keeping everything tidy.

Personally, I’m a fan of QuickBooks. It does what it says on the tin, it’s user-friendly, and brilliant for construction businesses. Handles CIS deductions, invoices, expenses. The lot. And it links up nicely with your bank accounts so everything stays clean and straight.

Whichever you choose, we can help get you set up and trained up. Which, if you’re not the most technical of people, will save you stuck shouting (and swearing) at the screen. You can thank us later.

Do you need a separate bank account?

Short answer: yes. If you’re affected by MTD, it’s time to separate your finances properly. Business money in one place, personal spending in another. It keeps your records cleaner, your bookkeeping simpler, and keeps HMRC from breathing down your neck.

We can help you open a dedicated business account if you don’t already have one. And once that’s up and running, everything else falls into place a lot easier.

Why it matters now

Even though MTD for income tax isn’t starting until 2026, letters are going out now. HMRC is giving people time to prepare, and trust me, you’ll want that head start. The sooner you sort out your systems, the easier the transition will be.

Don’t wait until you’re already over the threshold and panicking. Let’s get your software, banking and bookkeeping lined up ahead of time.

What about VAT?

If you’re VAT registered, you should already be doing MTD for VAT. That rule came in back in April 2022 for all VAT-registered businesses, no matter your turnover. If you’re not doing your VAT returns through MTD-compatible software, you’re already miles behind.

Make MTD work for you

MTD isn’t optional once you’re in the threshold. HMRC won’t accept excuses or last-minute rushing about. But if you sort it properly, it doesn’t have to be complicated.

Let’s make it work for you: cleaner records, better cashflow visibility, less of a ball ache at the end of the tax year.

So if you think you’ll be edging towards that income threshold in the next year or two – get in touch. We’ll make sure your books are ready, your software is sorted, and you stay well on the right side of the new rules.

Interested to find out more?

Call us on 01617 985789

Or book a meeting at https://calendly.com/d/ckfd-tzk-zbb

If you run a business, whether its running sites in construction or keeping things ticking over in hospitality, there’s plenty to learn from how Pep Guardiola is handling Man City right now. As a City supporter, I back them all the way. But let’s be honest, the team’s lost a bit of spark this season. It’s not about bad tactics or lack of effort. It’s about a thin squad, a few too many injuries, and trusted players starting to show their age. And in business, you get the same thing. Long-standing staff, once vital to the operation, start to slow down or get too comfortable. The team that got you here might not be the one to take you further. So how do you know who to back, who to support, and where you need to make some changes?

Bigger isn’t always better – it’s about who you can rely on

In business, it’s tempting to think that growing the team means adding more people. But if those people aren’t reliable, you’re just creating more problems and more ballaches. Whether it’s the lads on-site, a kitchen team, or your back office, you want people who show up, deliver, and don’t need chasing.

Even Guardiola admits he prefers a smaller squad. Fewer people, more trust. He’s not chasing numbers. He’s looking for players who are dependable. Same goes for you. It’s not about how many you’ve got. It’s about who you can count on when it matters.

You can’t predict everything, but you can be ready for it

You know how it goes. The site manager is off with a back injury, your second-in-command is at a funeral, and your best labourer has just handed in his notice. The work still needs to get done. Clients don’t care about your staffing problems.

That’s the sort of thing that’s hit City this season. Rodri out. Centre-backs are dropping like flies. It’s derailed them. Not because they’re a bad team, but because they didn’t have enough cover when it mattered.

In business, you’ve got to be ready for the gaps. That means developing people, cross-skilling where you can, and not leaving the whole load on one or two people.

Some people outgrow the role – others get left behind by it

As your business grows, the pace picks up. Expectations shift. What used to be a one-man job now needs a team. What was good enough two years ago doesn’t cut it now.

It’s not personal. It’s progress.

At City, there are players who’ve been top class for years. But they’re not what they used to be anymore. Not saying they’re not great players (despite what I often shout from my sofa on a Sunday afternoon), but for some reason they’re underperforming and more often than not, that is down to the management and team dynamic. Guardiola knows it – now he has to decide who still fits. 

Same for you. Be honest. Who’s keeping up? Who’s falling behind? Who could thrive again with the right support or a new role? Making time to find out could avoid the risk of dragging everyone down with outdated decisions.

The team members who hold everything together, keep projects moving, and step up without being asked are the gems of the business. If you’ve got someone like that, make sure they know they’re appreciated. Pay them what they’re worth. Don’t wait until they’re halfway out the door. Your team will be more likely to perform above standards if their hard work is acknowledged and they feel appreciated.

Loyalty’s great – until it starts costing you

We’ve all got that one person. Been with you since day one. Knows the business inside out. Was brilliant once. But now they’re just there, not making a whole lot of effort, slipping a bit. And even resisting change.

It’s hard to know what to do. You don’t want to be unfair. But you also can’t ignore it forever or make excuses because they’ve been around for as long as they have. That’s not fair to other members of the team either.

Even Guardiola’s got this issue. His midfield’s ageing, some players haven’t found form. He still believes in them – but belief doesn’t keep you top of the table. We’re a prime example of that. At some point, you’ve got to decide whether someone’s part of the future or just holding onto the past.

Your team reflects your leadership

If you’re always firefighting, jumping in to fix problems, or carrying people who can’t keep up, it wears you down. You get snappy. Drained. Short on ideas.

And the team sees it. They stop pushing. They start waiting.

That’s how businesses stall. And it’s not just you. Even top managers feel it. Guardiola’s said he’s struggling to keep the rhythm when the team isn’t firing. The mood of the boss sets the tone. If your energy’s off, it’s often because your team setup isn’t right.

Fix that, and the rest falls into place.

Make the call – before someone else does

If your best staff aren’t being recognised, they’ll go somewhere else. If your underperformers aren’t challenged, your top people will get fed up. You don’t have to cut all ties and start over. You just have to manage it properly.

At City, Pep’s now facing big calls. Do you refresh the squad? Do you keep trusting the old guard? Do you invest in new blood or back the players you’ve got?

You’ve got the same choices in business. Look at performance. Look at potential. And don’t wait until the results dip before you act.

Build a solid game plan

It’s not about loyalty vs leadership, or you vs the team. It’s about building the right team for the business you’ve got now. And the one you want in the future. If you don’t make the changes, the results will stay the same. There’s no growth in that.

Know your people. Pay your best ones what they’re worth. Support the ones who can grow. And be brave enough to let go of the ones who can’t. That’s what managing is.

I’m not Pep, and this isn’t the Etihad, but your business still needs a solid game plan. If you’re making big decisions without knowing your margins, cashflow, or who’s costing you more than they bring in, you’re guessing. And guessing costs money. Let’s take a proper look, get the facts, and sort it.

 

Interested to find out more?

Call us on 01617 985789

Or book a meeting at https://calendly.com/d/ckfd-tzk-zbb

If you’re a high earner with young children, first of all well done, but here’s something that might catch you off guard: once your income creeps over £100,000, even by a single pound, you’re forced to kiss goodbye to those 15 or 30 hours of free childcare a week.

Not reduced. Not renegotiated. Gone. Simple as that.

This has taken quite a few of my clients by surprise. I’m talking about hardworking doctors, dentists, consultants, business owners. People whose earnings look great on paper, but who suddenly find themselves forking out a big lump sum each month for childcare they were previously getting help with. AKA a less-than-ideal situation to be in.

The £100k rule: A pricey threshold

The moment your adjusted net income goes over £100,000, you no longer qualify for the 30 free hours of childcare per week. That support was worth thousands each year. And then it’s off the table. Just like that. With no warning.

It doesn’t matter if your income hits £100,001. There’s no gradual phasing out. Just an abrupt end to any sort of help.

If both parents work and meet the eligibility rules, this benefit can be a real turning point. But once one of you crosses that £100k mark, it’s gone. That can sting, especially when you’re already trying to keep up with rising mortgage rates, tax rises, and all the usual costs of having kids under five.

So what counts towards the £100k?

Here’s what your ‘adjusted net income’ includes:

• Your salary or self-employment income
• Rental income
• Dividends
• Any other taxable income
• Less pension contributions (we’ll get to that in a second)

So, if you’re edging close to the line, don’t panic yet. There are ways to bring your income back under £100,000 legally and efficiently. Let me explain how.

1. Pension contributions

This is the big one.

You can put up to £60,000 a year into your pension tax-free (subject to allowances and reducing if you earn more than £200k).

So if you’re earning £105,000, a pension contribution of £5,000 could bring your adjusted net income back under £100k. Not only do you keep your childcare support, you also boost your retirement pot and reduce your tax bill. Sounds nice doesn’t it?

It’s essentially a triple win.

A lot of business owners and limited company directors have some flexibility in how they pay themselves. Instead of taking that chunky dividend this year, consider a pension top-up.

Alright, you’re locking the money away until you’re getting on for 60 (at least), but the long-term gain often outweighs the short-term childcare spend.

2. Salary sacrifice schemes

Not quite as powerful as pensions, but every little helps. Just be aware that not everything qualifies, and some things that sound clever (like taking cash instead of a company car) don’t always count in your favour. Always best to check first.

Schemes like:

• Cycle to work (not something you’d catch me doing, but a lot of you are much fitter than me!)
• Electric vehicle leases
• Extra pension contributions (something you’ll thank yourself for later)
• Tech purchase schemes (laptops, phones etc.)

These reduce your gross income, which in turn lowers your taxable income. If you’re just slightly over the £100k mark, salary sacrifice might just tip the scales in your favour.

Have a word with your employer or accountant to see what’s available and what’s worth using. And don’t wait until the end of the tax year – you ideally want these in place sooner rather than later.

3. Employing your life partner

This one’s not for everyone, but it can work well in the right setup.

If your partner helps with the admin, invoicing, diary management, or any actual tasks in the business, you can legitimately employ them and pay them a salary.

Done properly, that salary becomes a business expense, which reduces your profits (and potentially your income below the threshold).

But here’s the key part: they must actually do the work, and you need to pay them at a reasonable rate for what they’re doing. No funny business. HMRC has no issue with this if it’s all above board. If it looks dodgy or inflated, you’ll have them knocking at your door.

Don’t get caught off guard

This isn’t about dodging tax or playing games. It’s about understanding the rules and making them work for you. Every one of the strategies above is entirely legal and HMRC-approved. But they do need to be carried out properly and documented the right way.

And a quick one to clear up while we’re here: school supplies and childcare bits aren’t deductible business expenses. Trying to put those through your company might seem clever, but it’s a guaranteed way to get HMRC sniffing around. Just don’t do it.

Get in touch with your accountant (or me) before making any big moves. The worst thing you can do is rush in and make it ten times worse.

Keep a tight grip on free childcare

Hitting six figures in earnings feels like a milestone, and it is one to be proud of. But like all good things, there’s a catch. Especially where HMRC is involved, it comes with hidden costs and disappearing benefits. If you’ve got young kids, the loss of childcare support can be a brutal one to add to the list.

So if you’re on the edge, do the maths. And if there’s a smart way to keep your income under that magic £100k line, without doing damage to your future finances, why wouldn’t you?

Sorted properly, you can have the best of both worlds: a growing income and the support you’re entitled to.

Drop me a line if you need a hand going through it all properly. Or share this with someone who might be about to get caught out. Better to know now than get a nasty bill come September. And timing is everything. Don’t wait until your income goes over the line. Otherwise, it’s too late.

 

Interested to find out more?

Call us on 01617 985789

Or book a meeting at https://calendly.com/d/ckfd-tzk-zbb