Making Tax Digital for Painters & Decorators

Making Tax Digital (MTD) is HMRC's initiative to move UK tax records and submissions into the digital age. It affects all UK businesses, including painters and decorators, and the rules are being expanded over the coming years.

For decorators, MTD means keeping digital records of your income and expenses throughout the year and using compatible software for your tax submissions. The days of keeping paper records and submitting a paper tax return are ending.

This guide explains what MTD means for painters and decorators, what you need to do to comply and how to stay prepared without adding a lot of extra admin to your business.

MTD for VAT

Making Tax Digital for VAT has been mandatory for all VAT-registered businesses since April 2022. If you are VAT-registered, you must keep digital records and submit your VAT return using MTD-compatible software. You can no longer submit a paper VAT return.

This means you need to use accounting software that supports MTD — such as Xero, Sage, QuickBooks or FreeAgent — to submit your VAT return. The software connects directly to HMRC and submits the return electronically.

If you are not VAT-registered, MTD for VAT does not affect you yet. However, you should still keep digital records to prepare for MTD for Income Tax.

MTD for Income Tax

Making Tax Digital for Income Tax (MTD ITSA) is being introduced for self-employed businesses and landlords. It is being phased in based on income thresholds, with the first wave affecting businesses with income over £50,000 from April 2026, and those over £30,000 from April 2027.

Under MTD ITSA, you will need to keep digital records and submit quarterly updates to HMRC using MTD-compatible software, rather than submitting a single annual Self Assessment return. A final declaration will also be required.

If you are a sole trader decorator, MTD for Income Tax will likely affect you in the coming years. The best preparation is to start keeping digital records now, so you are ready when the rules apply to you.

What You Need to Do to Comply

To comply with Making Tax Digital, you need to do two things: keep digital records of your income and expenses, and use MTD-compatible software for your submissions. This applies to both VAT and Income Tax (when MTD ITSA is in effect for you).

Digital records means recording your income and expenses in digital format — not on paper. You can use accounting software, a spreadsheet or a combination, but the records must be digital and kept up to date.

MTD-compatible software means software that can connect to HMRC's systems and submit returns electronically. Most modern accounting software — Xero, Sage, QuickBooks, FreeAgent — supports MTD. Check that your chosen software is MTD-compatible.

How to Stay Prepared Without Extra Admin

The key to MTD compliance without extra admin is to keep your records digital throughout the year, not just at deadline time. If you use software to manage your invoices and expenses as you go, your records are always up to date and MTD-compliant.

Trade Assist helps decorators stay prepared by keeping your income and expense records digital and organised automatically. Every invoice you create records income. Every expense you log records a cost. At any time, you can export a complete summary for your accountant or MTD-compatible software.

Trade Assist does not submit directly to HMRC — it is not MTD bridging software. Instead, it keeps your records organised and produces exports that your accountant or accounting software can use for MTD submission. This division of labour means you get decorator-specific business management in Trade Assist and formal accounting and MTD submission in your accounting software.

Frequently Asked Questions