New tax year: what it means for sole traders and CIS subcontractors

With the new tax year now underway, this is a good point for sole traders and CIS subcontractors to review their position and, where possible, take action early.

2025–26 has started

From 6 April, you can now begin submitting records for the 2025–26 tax year.

For some, this will mean refunds may be available earlier than usual — particularly where CIS deductions have been suffered at source.

Many subcontractors will find they have overpaid tax during the year, and refunds can often be claimed as soon as records are up to date rather than waiting until the end of the tax year.

Submitting information promptly can help bring those repayments forward.

Making Tax Digital for Income Tax (MTD for ITSA)

The new tax year also brings us closer to the introduction of MTD for Income Tax.

If your combined gross income from self-employment and UK property exceeded £50,000 in the 2024–25 tax year, you are expected to come within MTD from 6 April 2026.

This will require:

• Maintaining digital records
• Submitting quarterly updates to HMRC
• Completing a final end-of-year declaration

For many, this represents a shift from annual reporting to a more regular cycle.

What to consider now

• Ensure bookkeeping is up to date and records are complete
• Check that all income and expenses are being captured correctly
• Make sure any CIS deductions are recorded and supported
• Consider whether your current setup will support quarterly reporting

Taking a structured approach now will make the transition to MTD much more straightforward.

It also means that, where refunds are due, they can be identified and processed earlier.

If you’re unsure how this applies to your situation, or would like to get things set up properly for the year ahead, you can get in touch here.