Making Tax Digital for Construction: CIS Digital Record-Keeping from April 2026

Making Tax Digital (MTD) is expanding to cover self-employed individuals from April 2026, starting with those earning above £50,000. For the construction industry, this intersects directly with CIS — creating new digital record-keeping requirements that affect both contractors and subcontractors.

What Is Making Tax Digital?

MTD requires businesses and self-employed individuals to:

• Keep digital records of income and expenses
• Submit quarterly updates to HMRC through compatible software
• File a final declaration instead of a traditional Self Assessment return

Paper records and spreadsheets are no longer acceptable as primary record-keeping methods.

How MTD Affects CIS

For contractors (those who pay subcontractors), MTD creates three new pressures:

1. Digital Verification Records

CIS subcontractor verifications must be recorded digitally. This means the UTR number, NI number, verification date, and deduction rate for every subcontractor should be stored in software — not a filing cabinet or spreadsheet.

2. Monthly Return Documentation

CIS monthly returns already require digital submission, but MTD extends this to the supporting documentation. You need a digital audit trail showing how each deduction was calculated and applied.

3. Quarterly Reporting Alignment

Self-employed subcontractors will be submitting quarterly updates. Discrepancies between your CIS returns and their quarterly updates will be flagged more quickly, making accuracy essential.

The April 2026 Timeline

Date	Requirement
April 2026	MTD for self-employed with income >£50,000
April 2027	MTD for self-employed with income >£30,000
TBC	MTD for smaller businesses (threshold under review)

What Contractors Should Do Now

1. Move CIS records to digital. If your subcontractor verification records, deduction calculations, and monthly returns are still in spreadsheets, migrate them now.
2. Centralise compliance documents. Insurance certificates, CSCS cards, and CIS verifications should be in one digital system — not scattered across email and filing cabinets.
3. Set up automated tracking. MTD increases the administrative burden. Automated expiry alerts and reminder emails reduce the time spent on compliance follow-up.
4. Prepare your subcontractors. Many subs will need to adopt MTD-compatible software. Help them understand the timeline and requirements.

How VendorProof Fits In

VendorProof is not MTD software (that is your accounting system’s job), but it solves the document management side of CIS compliance. Track every subcontractor’s verification status, store insurance certificates and CSCS cards, and get automated expiry reminders — all in one digital system with a complete audit log.

With MTD requiring digital records from April 2026, now is the time to get your subcontractor documentation out of spreadsheets. VendorProof is free for up to 10 subcontractors.