Can I claim tools and equipment under CIS?

Learn whether you can claim tools and equipment as expenses under the Construction Industry Scheme (CIS). Understand what qualifies, how to claim, and how it affects your tax bill.

If you work as a subcontractor in the construction industry, you are likely registered under the Construction Industry Scheme (CIS). One of the most common questions subcontractors ask is whether they can claim the cost of tools and equipment as business expenses.

The answer is yes — you can usually claim tools and equipment under CIS, as long as they are used wholly and exclusively for your construction work. These expenses can reduce your taxable income, meaning you pay less tax when completing your annual Self Assessment return.

This article explains what counts as tools and equipment under CIS, how to claim them, and what records you need to keep.

What is CIS?

The Construction Industry Scheme is an HMRC system designed to collect tax from self employed workers in the construction sector. Under CIS, contractors deduct 20% (or 30% if you are not registered) from your payments and send it directly to HMRC as an advance towards your tax bill.

Because CIS subcontractors are still classed as self employed, they must file a Self Assessment tax return each year. When completing this return, you can claim allowable expenses — including tools and equipment — to reduce your overall taxable profit.

Claiming tools and equipment as expenses

Under CIS, you can claim the cost of any tools, machinery, or safety equipment that you need to carry out your work. HMRC considers these allowable expenses, provided they are used only for business purposes.

You can claim:

  • Hand tools such as drills, saws, hammers, and wrenches.

  • Power tools including sanders, grinders, and nail guns.

  • Ladders, scaffolding, and other construction equipment.

  • Safety gear like helmets, gloves, boots, and goggles.

  • Specialist tools required for your trade (for example, a plumber’s torch or electrician’s tester).

If you buy larger or more expensive equipment such as a cement mixer or generator, you may need to claim it differently using capital allowances, which we explain below.

Capital allowances for expensive equipment

When tools or machinery have a long lifespan (typically over one year) or cost more than a few hundred pounds, they are treated as capital assets.

Instead of claiming the full cost as an expense in one year, you can claim capital allowances, which allow you to deduct the cost over time or in full using the Annual Investment Allowance (AIA).

For example:

  • You buy a power saw for £800.

  • You can claim the full £800 as a capital allowance under AIA.

  • This reduces your taxable profit by £800 for that tax year.

Your accountant can help you decide whether a purchase should be treated as a normal expense or a capital allowance.

Replacement and repair of tools

If you replace worn or broken tools, or pay for repairs, these costs are also deductible. For instance:

  • Replacing a damaged drill.

  • Paying to repair a power tool.

  • Buying replacement blades, bits, or accessories.

The key rule is that these costs must be directly related to your work under CIS. Tools used partly for personal projects cannot be claimed in full — only the business portion qualifies.

What you cannot claim

You cannot claim:

  • Tools or equipment used for personal use.

  • Tools provided by your employer or contractor.

  • Depreciation (you must use capital allowances instead).

  • Items bought for resale (these are treated as stock).

HMRC expects all expenses to be reasonable and necessary for your business. Overclaiming or including personal purchases could trigger an investigation or result in penalties.

How to claim tools and equipment under CIS

You claim your tools and equipment through your Self Assessment tax return at the end of each tax year. The steps are:

  1. Record all purchases: Keep receipts, invoices, and payment records for every tool or item of equipment.

  2. Categorise your expenses: Separate small tools and consumables from larger capital items.

  3. Add up your totals: Calculate your total allowable expenses for the year.

  4. Enter the figures: Report the total expenses on the Self Employment section of your tax return.

If you use accounting software such as QuickBooks or Xero, you can record each purchase as you go, making your tax return much easier to complete.

How claiming affects your CIS refund

Most CIS subcontractors overpay tax during the year because contractors deduct tax from payments before expenses are considered.

By claiming tools and equipment — along with other allowable expenses such as travel, fuel, insurance, and materials — you reduce your taxable profit. This often means you are due a tax refund from HMRC after filing your return.

For example:

  • You earn £40,000 under CIS.

  • Contractors deduct 20% tax (£8,000).

  • You have £5,000 in allowable expenses, including tools.

  • Your taxable profit is £35,000, and the actual tax owed is £7,000.

  • HMRC refunds £1,000 (the difference between £8,000 and £7,000).

The more legitimate expenses you claim, the more accurate your tax position will be.

Keeping records for HMRC

HMRC requires you to keep accurate records of your business income and expenses for at least five years after the 31 January submission deadline for the tax year.

Make sure to keep:

  • Receipts and invoices for every tool or equipment purchase.

  • Bank statements showing payments.

  • Notes about each item’s business purpose.

  • Details of repairs or replacements.

If you lose receipts, try to get copies from suppliers or show clear evidence of purchase, such as card statements or digital invoices.

Other CIS expenses to consider

In addition to tools and equipment, you may also be able to claim:

  • Work clothing and protective gear.

  • Vehicle expenses (fuel, repairs, insurance).

  • Materials and supplies.

  • Public liability insurance.

  • Accountancy fees.

  • Travel and accommodation for work.

Including all legitimate expenses ensures you pay tax only on your actual profit, not your total income.

How an accountant can help

An accountant experienced in CIS can help you:

  • Identify all allowable expenses.

  • Calculate capital allowances for larger purchases.

  • Maximise your tax refund.

  • Keep records that comply with HMRC requirements.

  • File your Self Assessment accurately and on time.

This support is especially useful if you buy tools regularly or are unsure which items qualify as business expenses.

The bottom line

Yes, you can claim tools and equipment under CIS as long as they are used solely for your construction work. Smaller tools are usually treated as normal business expenses, while more expensive or long-term assets fall under capital allowances.

By keeping detailed records and claiming correctly, you can reduce your taxable income, improve your cash flow, and potentially receive a larger CIS tax refund. Working with an accountant ensures you make the most of these deductions while staying fully compliant with HMRC rules.