Can I Claim Mileage and Travel Under CIS?

At Towerstone Accountants we provide specialist CIS accountancy services for contractors, subcontractors, and construction businesses across the UK. We created this webpage for people working in construction who want clear guidance on CIS, including registration, deductions, refunds, and common compliance tasks, without jargon. Our aim is to help you stay compliant with HMRC, avoid costly errors, and keep your records in good order.

This is one of the most common questions I get from subcontractors working under the Construction Industry Scheme and it is easy to see why. Travel is a real cost in construction, sites move, distances add up quickly, and when tax is already being deducted at source through CIS it can feel unfair not knowing whether mileage and travel costs can be claimed as well.

I have worked with CIS subcontractors for many years, from sole traders just starting out to established limited companies operating across multiple sites, and the confusion around mileage and travel is consistent. Some people assume nothing can be claimed because CIS is involved, others assume everything is allowable, and both positions can cause problems if handled incorrectly.

In this article I want to explain clearly how mileage and travel work under CIS, what you can and cannot claim, how it fits into your tax return rather than your CIS deductions, and how to keep yourself on the right side of HMRC. I will speak from experience, use practical examples, and focus on how this works in the real world rather than just repeating guidance.

Understanding CIS and expenses in context

Before getting into mileage and travel it is important to clear up a key misunderstanding. CIS does not change what expenses you are allowed to claim. CIS is simply a method of collecting tax in advance.

This is a crucial point. I regularly speak to subcontractors who believe that because they are under CIS they cannot claim expenses or that expenses should reduce CIS deductions. That is not how the scheme works.

CIS deductions are calculated on labour payments before expenses. Expenses are claimed later through your tax return. The two processes are separate but linked.

Once you understand that separation the rules around mileage and travel become much clearer.

The difference between CIS deductions and allowable expenses

CIS deductions are taken by the contractor and sent to HMRC as tax paid on your behalf. They are based on turnover not profit and they do not take account of your costs.

Allowable expenses, including mileage and travel, are claimed by you when completing your Self Assessment tax return or your company accounts. These expenses reduce your taxable profit and therefore reduce the total tax you owe.

This means you do not get mileage back through CIS itself. Instead you claim it later and it offsets against the tax you would otherwise pay.

I always explain it this way. CIS affects when tax is paid, expenses affect how much tax is paid.

Who this applies to under CIS

Mileage and travel rules apply slightly differently depending on whether you are a sole trader subcontractor or operating through a limited company, but the underlying principles are similar.

This article focuses mainly on subcontractors working under CIS who are

• Sole traders

• Partnerships

• Limited companies providing construction services

If you are an employee paid through PAYE then different travel rules apply and CIS does not come into it.

What HMRC considers allowable travel

HMRC allows you to claim travel expenses where the journey is wholly and exclusively for business purposes. In construction this usually means travelling to temporary workplaces.

The concept of a temporary workplace is central to understanding what you can claim.

In simple terms a temporary workplace is somewhere you attend to carry out work for a limited duration or for a specific task. Most construction sites fall into this category.

If you are travelling from home to a temporary site then that travel is usually allowable.

If you are travelling to a permanent place of work then it is not.

This distinction causes most of the confusion I see in practice.

Home to site travel for CIS subcontractors

For most CIS subcontractors travel from home to site is allowable because construction sites are temporary workplaces.

If you work on one site for a few weeks or months and then move on to another site then each site is treated as temporary. Travel to and from those sites can usually be claimed.

This is very different to someone who travels every day to the same office or depot for years, which would normally be classed as a permanent workplace.

I often reassure clients that HMRC recognises the mobile nature of construction work and the rules reflect that reality.

When travel may not be allowable

There are situations where travel is not allowable and it is important to understand these to avoid overclaiming.

If you attend the same site continuously for a long period and it becomes your main place of work then HMRC may consider it a permanent workplace. As a general rule if you expect to be on the same site for more than 24 months and you spend most of your working time there then travel may no longer be allowable.

I also see issues where subcontractors travel first to a yard depot or office every morning and then go on to site. Travel between home and that permanent base is not allowable, but travel from the base to site usually is.

Understanding how your working pattern fits these rules is key.

Mileage claims for CIS sole traders

If you are a sole trader working under CIS you can claim mileage using one of two methods.

You can use the simplified mileage method which allows you to claim a fixed rate per mile for business travel in your own vehicle. The current rates are set by HMRC and cover fuel insurance servicing and running costs.

Alternatively you can claim actual vehicle costs based on the business proportion of your expenses, such as fuel repairs insurance and depreciation.

Most sole traders use the mileage method because it is simpler and easier to manage.

Whichever method you choose you must keep records of your business journeys, including dates destinations and mileage. CIS does not change this requirement.

Claiming mileage does not reduce CIS deductions

This is worth repeating because it causes ongoing confusion. Claiming mileage does not reduce the CIS tax deducted from your invoices.

The contractor deducts CIS tax based on labour payments regardless of your travel costs. You then claim mileage on your tax return and HMRC factors it into your final tax calculation.

This is why some people feel they are paying too much tax during the year and then receive a refund after submitting their return.

Travel costs beyond mileage

Mileage is not the only travel expense you may be able to claim. Depending on your work you may also be able to claim

• Public transport costs such as trains or buses to site

• Parking fees incurred while working

• Tolls and congestion charges related to business travel

• Overnight accommodation where work requires staying away from home

• Subsistence costs within HMRC guidelines in certain circumstances

These costs must still meet the wholly and exclusively test and be related to temporary workplaces.

I often review these claims with clients to make sure they are reasonable and well evidenced.

Limited companies and CIS travel claims

If you operate through a limited company under CIS the mechanics are slightly different but the principle remains the same.

Mileage can be paid by the company to the director or employee at HMRC approved rates. This is treated as a tax free reimbursement rather than an expense claim through Self Assessment.

Alternatively the company can claim actual vehicle costs if the vehicle is owned by the company.

The key difference here is that the claim sits within the company accounts rather than a personal tax return.

CIS deductions suffered by the company are offset against Corporation Tax or PAYE liabilities, while travel costs reduce taxable profits.

Common mistakes I see with CIS mileage claims

There are a few recurring mistakes I see when reviewing CIS mileage and travel claims.

One is assuming travel to any site is automatically allowable without considering whether it has become a permanent workplace.

Another is failing to keep proper mileage records. HMRC does not require perfection but they do expect consistency and credibility.

I also see people trying to offset travel costs directly against CIS deductions which is not how the system works.

Finally some people underclaim because they believe CIS disqualifies them from claiming expenses at all, which is simply not true.

How mileage claims affect your tax position under CIS

Mileage and travel expenses reduce your taxable profit. This in turn reduces the total tax you owe for the year.

If CIS deductions already exceed that tax liability then you may be due a refund. If they do not then the expenses still reduce the balancing payment you need to make.

In practice mileage claims can make a significant difference, particularly for subcontractors travelling long distances regularly.

I have seen cases where proper mileage claims turn a sizeable tax bill into a refund.

Keeping records that stand up to scrutiny

HMRC expects you to keep records to support mileage and travel claims. This does not need to be complicated but it does need to be consistent.

A simple mileage log showing date start location destination purpose and miles travelled is usually sufficient. Many people use apps or spreadsheets to manage this.

Receipts should be kept for other travel costs such as parking or accommodation.

From my experience HMRC is far more comfortable with modest well evidenced claims than large round number estimates.

What about travelling between sites

Travel between sites during the working day is almost always allowable. This includes travelling from one site to another or from site to a supplier to collect materials.

These journeys are clearly business related and rarely cause issues in practice.

Can contractors reimburse travel under CIS

Sometimes contractors reimburse travel costs separately from labour payments. This can be perfectly acceptable provided it is handled correctly.

If travel costs are reimbursed and clearly itemised they should not be subject to CIS deductions. However if travel is simply rolled into the labour payment then CIS will apply.

Clarity on invoices is important here. I often advise subcontractors to separate labour and reimbursable expenses clearly to avoid confusion.

My experience advising CIS subcontractors on travel claims

From my experience the subcontractors who manage mileage and travel well are those who treat it as part of their routine record keeping rather than an afterthought at year end.

Once the habit is in place the process becomes straightforward and the tax benefit is realised consistently.

Those who leave it until the tax return is due often miss claims or struggle to evidence them properly.

Looking ahead and staying compliant

HMRC continues to focus on accuracy and consistency rather than catching people out for genuine claims. If your mileage and travel claims are reasonable well recorded and clearly business related they are unlikely to cause problems.

Understanding that CIS does not remove your right to claim expenses is empowering. It allows you to plan cash flow better and understand why refunds arise.

Final thoughts from experience

So can you claim mileage and travel under CIS, yes you can, and in most cases you should, provided the travel is for business and to temporary workplaces.

CIS does not prevent you from claiming expenses, it simply changes how and when tax is collected.

The key is understanding the separation between CIS deductions and expense claims, keeping good records, and applying the rules consistently.

If you take that approach mileage and travel become a valuable part of managing your tax position rather than a source of confusion or anxiety.

You may also find our guidance on what is a cis deduction and how do CIS tax refunds work for subcontractors helpful when dealing with related CIS questions. For a broader overview of CIS rules, compliance, and support, you can visit our cis guidance hub.