How to sign up for Making Tax Digital: a CIS subcontractor walkthrough

Which return HMRC tests, and when your MTD sign-up is due

HMRC decides whether you are in Making Tax Digital for Income Tax by reading the Self Assessment return you have already filed. Qualifying income over £50,000 on the 2024/25 return brought sole traders into MTD from 6 April 2026, over £30,000 on the 2025/26 return brings them in from 6 April 2027, and over £20,000 on the 2026/27 return from 6 April 2028. This page covers the mechanics of the sign-up itself for a CIS subcontractor: what HMRC asks for at each stage, when your accountant can do it instead, which update periods to pick, and what quarterly reporting does to the timing of a CIS refund.

Qualifying income is measured before expenses and combines self-employment and property income. For a CIS subcontractor it is the gross value of the work invoiced, not the net figure that lands in the bank after 20% deductions. That distinction, and the way it catches subcontractors who assume their bank receipts are the test, is covered in full in our guide to Making Tax Digital and CIS.

Return HMRC tests	Qualifying income	MTD start date	Sign up by
2024/25	Over £50,000	6 April 2026	Already due, sign up now
2025/26	Over £30,000	6 April 2027	Before the first quarterly update of 2027/28
2026/27	Over £20,000	6 April 2028	Before the first quarterly update of 2028/29

Being in scope and being signed up are two different things. HMRC writes to the people it identifies from their returns, but that letter is a prompt, not a registration. Nothing is switched on automatically, and no quarterly update can be filed until the sign-up is done and software is linked to your HMRC record.

What a subcontractor needs before starting the sign-up

Two conditions have to be met before HMRC will let you through the service at all. You must be registered for Self Assessment, and you must have submitted a tax return in the last 2 years. A subcontractor who registered for CIS but has never filed a return cannot sign up until that first return is in.

Have the following to hand before you start:

• The Government Gateway user ID and password you got when you registered for Self Assessment. The sign-up will not accept a different account.
• Your National Insurance number and Unique Taxpayer Reference.
• The trading name and address of your business, and a short description of the work (for example, groundworks, electrical installation, plastering).
• The date the business started, if that was within the last 2 tax years.
• The tax year you are starting MTD from.
• Details of every other self-employment or property income source you have, because each is reported as a separate business.

HMRC will run an identity check. If the Gateway credentials alone are not enough it asks security questions based on records it already holds, so having a recent payslip, P60 or previous return nearby saves a restart.

Signing yourself up for MTD: the walkthrough

The sequence on the HMRC service is short, but the order matters. Choosing software last is the most common cause of a sign-up that stalls half finished.

1. Check you are not exempt. If you have grounds for exemption, apply first. Until an exemption is granted the obligation stands.
2. Pick MTD-compatible software before you sign up. It must be on HMRC's list of recognised software for MTD for Income Tax. Handling CIS or Self Assessment is not the same qualification. Our review of the best CIS accounting software compares the packages that handle contractor statements and quarterly submissions together.
3. Sign in to the HMRC sign-up service with your Self Assessment Government Gateway user ID and password, and clear the identity check.
4. Confirm the tax year you are starting from. Choosing the wrong year is the error that causes the most trouble later, because it determines which quarterly updates HMRC expects and which are treated as missing.
5. Enter your business details for each income source: name, address, nature of the trade, and start date where it falls in the last 2 tax years. A CIS trade and a rental property are entered separately.
6. Choose your update periods, standard or calendar. See the section below.
7. Authorise your software to interact with HMRC. This is a separate approval inside the software itself, granting it permission against your HMRC record. Sign-up without this step leaves you unable to submit.
8. Enter your CIS records from 6 April of the start year onwards so the first quarterly update reflects a full period rather than the weeks since you set the software up.

You can also sign up voluntarily before you are required to. For a subcontractor heading towards the April 2027 or April 2028 thresholds, a voluntary year is a genuinely useful rehearsal, because the first update deadline after a rushed sign-up is not the moment to discover that contractor statements are not reconciling.

Letting an accountant sign you up: agent authorisation for MTD

An agent can complete the whole sign-up for you, and for most subcontractors that is the sensible route, because the same person then owns the quarterly submissions and the final declaration.

The agent needs an agent services account, which is a different account from the older HMRC online services for agents. Authorisation then falls into one of three positions:

• Already authorised for Self Assessment. That existing authorisation is recognised for MTD for Income Tax. The agent checks it appears in their agent services account and adds it if it is missing. No new paperwork from you.
• Already authorised through a digital handshake. The agent can sign you up without adding anything.
• Not yet authorised. The agent sends an authorisation request from their agent services account, you approve it, and they proceed.

	Signing up yourself	Agent signs you up
Account needed	Self Assessment Government Gateway ID	Agent services account
Authorisation step	Identity check only	Existing Self Assessment authorisation, or digital handshake you approve
Who chooses update periods	You	Agent, usually aligned to your accounts
Who submits quarterly updates	You, through your software	Agent, through their software
Who reconciles CIS statements	You	Agent, as part of the quarterly cycle

Choosing update periods as a CIS subcontractor

At sign-up you choose between standard and calendar update periods. Both carry the same four deadlines. The difference is where each period ends.

Update	Standard period ends	Calendar period ends	Deadline
1	5 July	30 June	7 August
2	5 October	30 September	7 November
3	5 January	31 December	7 February
4	5 April	31 March	7 May (following tax year)

Most CIS subcontractors should take the standard periods, because they end on the same dates as the tax year the final declaration is built on, so nothing needs re-cutting at year end. Calendar periods suit a business whose accounts already run to 31 March. You choose before your first submission and cannot switch part way through a tax year once you have begun.

One point specific to construction: the CIS payment and deduction statement from each contractor is your source document for the income figure in each update, and the gross amount on it is the income entry. Getting statements in promptly matters more under quarterly reporting than it did under an annual return, because a missing March statement now shows up in an update filed in May rather than in a return filed the following January. Our guide to CIS record keeping sets out what to retain and for how long.

What quarterly updates do to CIS refund timing

This is the question subcontractors ask most often at sign-up, and the honest answer is that quarterly reporting does not bring the money forward.

A quarterly update carries income and expense totals only. No tax is calculated at that stage, no payment is due, and no repayment is triggered. Your CIS deductions suffered across the year are not part of the quarterly figures at all: they are entered at the final declaration after 5 April, which is the point at which the deductions taken at 20% on your labour are set against your actual liability and any overpayment is identified.

So the refund route for a sole-trader subcontractor is unchanged in timing. You can file from 6 April after the tax year ends, the final declaration deadline is 31 January following, and the repayment follows the filing. What MTD changes is that the final declaration cannot be submitted until the quarterly updates for that year are in, which means a subcontractor who ignores the quarterly obligation for a year has blocked their own refund rather than merely delayed some paperwork. The mechanics of the claim itself are covered in how to claim your CIS tax refund.

Limited companies are outside MTD for Income Tax entirely, and the real-time recovery of deductions through the Employer Payment Summary is unaffected by any of this. If the speed of recovery is what is driving your thinking, the structural comparison in CIS sole trader or limited company is the more useful read.

To see what your position looks like once the deductions are set against the bill, run your figures through our CIS Self Assessment calculator.

Penalties and exemptions once you are signed up

For subcontractors mandated from April 2026, HMRC will not issue penalty points for late quarterly updates during 2026/27. That easement covers quarterly-update points and nothing else. Late final declarations and late payments are penalised in full from day one.

From 2027/28 onwards the points system runs normally: one point per missed quarterly update or tax return deadline, a £200 penalty at 4 points, and a further £200 for each miss after that. On the payment side for 2026/27, nothing is charged up to 15 days late, 3% of the tax outstanding at day 15 applies from day 16, a further 3% of the amount outstanding at day 30 applies from day 31, and an annualised 10% then runs on the balance until it is paid. The first two percentages rise to 4% for 2027/28.

If you cannot reasonably use digital tools, exemption is available on digitally excluded grounds, which include age, disability, location without reliable internet access and religious belief. A temporary exemption is also available until at least April 2027 in defined circumstances. You, your tax agent, or a friend or family member with your authorisation can apply, and a single application should cover every ground you are relying on. Apply before your start date, because the obligation continues until the exemption is granted.

The sign-up itself takes minutes. The work that matters sits either side of it: picking software that handles contractor statements properly, choosing the right start year and update periods, and getting your CIS records in from the first day of the tax year rather than from the day the software was installed. Get those three right and the quarterly cycle becomes routine, and the final declaration produces the refund it always did.

If you would rather have the sign-up, the authorisation and the quarterly submissions handled for you alongside your CIS position, see our services page or get in touch.