What Expenses Can You Claim as a CIS Subcontractor
Allowable expenses for CIS subcontractors: tools, travel, clothing, insurance, and more. How expenses reduce your tax bill and increase your CIS refund.
Key Actions
- Keep receipts for all tools, materials, and work-related purchases
- Track mileage to and from construction sites daily
- Claim protective clothing and safety equipment as expenses
- Separate material costs (on CIS statements) from your own business expenses
- File Self Assessment with all expenses to maximise your CIS refund
As a CIS subcontractor, your tax bill is based on your profit — not your total income. Every legitimate expense you claim reduces your taxable profit, which means you pay less tax and get a larger CIS refund.
Many subcontractors miss out by not claiming everything they're entitled to. This guide covers the expenses most relevant to construction work.
How Expenses Affect Your CIS Refund
CIS deductions (20%) are calculated on your gross payments. But your actual tax is calculated on your profit after expenses. The bigger the gap between the two, the larger your refund.
Example:
| Item | Without expenses | With £8,000 expenses |
|---|---|---|
| CIS income | £40,000 | £40,000 |
| Expenses claimed | £0 | £8,000 |
| Taxable profit | £40,000 | £32,000 |
| Tax + NI due | £8,260 | £5,860 |
| CIS deducted (20%) | £8,000 | £8,000 |
| Refund / balance | Owe £260 | Refund £2,140 |
Claiming £8,000 in legitimate expenses turns a £260 bill into a £2,140 refund.
Expenses vs Materials on Your CIS Statement
This is an important distinction:
- Materials on your CIS statement — materials you supplied for a specific job that the contractor deducts before calculating your CIS. These reduce the amount subject to the 20% deduction
- Business expenses — your own costs of running your business (tools, travel, insurance, etc.). These reduce your taxable profit on your Self Assessment
They are not the same thing. You can claim both.
Example: You buy bricks for a client's job (£500) and a new drill for your toolkit (£120). The bricks go on your CIS statement as materials. The drill is a business expense on your tax return.
Tools and Equipment
Most hand tools and smaller power tools can be claimed as expenses in the year you buy them.
Can claim:
- Hand tools (hammers, screwdrivers, spanners, levels, tape measures)
- Power tools (drills, saws, grinders, nail guns)
- Tool bags and boxes
- Replacement blades, bits, and accessories
- Small equipment under roughly £1,000
For larger equipment (over £1,000), you may need to claim capital allowances instead of deducting the full cost in one year. The Annual Investment Allowance (£1 million for 2025/26) covers most purchases, but keep records of the purchase price and date.
Can't claim:
- Tools bought for personal/hobby use
- Equipment not used for your business
Travel and Vehicles
Travel between your home and construction sites is usually claimable because, as a self-employed subcontractor, you don't have a fixed workplace.
Mileage Method (Simplified)
The simplest approach — claim a flat rate per mile:
| Miles per year | Rate |
|---|---|
| First 10,000 miles | 45p per mile |
| Over 10,000 miles | 25p per mile |
Example: You drive 12,000 business miles in a year.
- 10,000 × 45p = £4,500
- 2,000 × 25p = £500
- Total claim: £5,000
You need a mileage log: date, destination, purpose, miles driven.
Actual Cost Method
Alternatively, claim the actual costs of running your vehicle:
- Fuel
- Insurance
- Road tax
- MOT and servicing
- Repairs
- Breakdown cover
- Parking charges
If you use the vehicle for both business and personal use, calculate the business proportion (e.g., 70% business miles = 70% of costs).
You can't switch between mileage and actual costs for the same vehicle. Once you choose a method for a vehicle, you're locked in for as long as you use it for business.
Other Travel
- Public transport — train, bus, and tube fares to sites
- Parking — site parking and pay-and-display
- Tolls — bridge and road tolls for business journeys
- Overnight accommodation — if working away from home
- Meals on overnight trips — reasonable meal costs when staying away
Can't claim: fines, penalty charges, or travel between home and a permanent office if you have one.
Clothing and Safety Equipment
Can claim:
- High-visibility jackets and vests
- Hard hats and safety helmets
- Steel-toe boots and safety footwear
- Work gloves
- Overalls and coveralls
- Eye protection and ear defenders
- Dust masks and respirators
- Waterproof work clothing
- Knee pads
Can't claim:
- Everyday clothing worn to work (jeans, t-shirts, trainers)
- Clothing that could be worn outside of work, even if you only wear it on site
The test is whether the clothing is specifically for protection or is a uniform. If you'd wear it to the shops, it's not claimable.
Insurance
Can claim:
- Public liability insurance
- Professional indemnity insurance
- Tools and equipment insurance
- Personal accident insurance (if work-related)
- Vehicle insurance (business proportion)
Can't claim:
- Personal life insurance
- Home contents insurance (unless working from home — see proportion rules)
Phone and Communication
Can claim:
- Business mobile phone costs
- Business proportion of a personal phone bill
- Mobile data used for work (checking emails, navigation)
How to calculate: If roughly half your calls and data are business-related, claim 50% of the bill. Keep a few months of itemised bills as evidence of the split.
Professional Costs
Can claim:
- Accountancy fees
- Tax return preparation costs
- CSCS card fees and renewal
- Trade body memberships (e.g., Federation of Master Builders)
- Training courses that improve existing skills
- Construction-related qualifications and certifications
Can't claim:
- Training for a completely new trade (not related to your current work)
- Legal fines or penalties
Financial Costs
Can claim:
- Bank charges on your business account
- Interest on business loans
- Credit card interest (business purchases only)
- Hire purchase interest on work equipment
Can't claim:
- Loan capital repayments (only the interest portion)
- Personal banking fees
Home Office
If you do admin, invoicing, or paperwork at home, you can claim a proportion of home costs.
Simplified method: £10-£26 per month based on hours worked from home (25+ hours/month minimum).
Actual costs: Calculate the proportion of rent, utilities, council tax, and broadband used for business.
For most CIS subcontractors who mainly work on site, the simplified method is usually sufficient for the occasional evening or weekend admin.
Expenses You Can't Claim
To be clear, these are never allowable:
- Fines and penalties — parking tickets, speeding fines, HMRC penalties
- Client entertainment — buying lunch for a contractor or client
- Everyday clothing — anything not specifically protective or uniform
- Personal expenses — groceries, personal phone, home broadband (full amount)
- Savings and investments — pension contributions are handled separately
Keeping Records
For every expense, keep:
- Receipt or invoice with the date, amount, and what you bought
- Bank or card statement showing the payment
- A note of the business purpose if it's not obvious from the receipt
Photograph paper receipts — they fade quickly on building sites. A dedicated folder on your phone or a receipt-scanning app saves time at year end.
Keep all records for at least 5 years after the 31 January filing deadline.
This guide is for informational purposes only and does not constitute tax, legal, or financial advice. Tax rules change frequently. Always verify current requirements on GOV.UK or consult a qualified accountant for your specific situation.
Official Sources
- Expenses if you're self-employed - GOV.UK
- Simplified expenses if you're self-employed - GOV.UK
- Capital allowances - GOV.UK
- CIS for subcontractors - GOV.UK