What expenses can CIS subcontractors claim?

If you work as a subcontractor under the Construction Industry Scheme (CIS), you can often reduce your tax bill by claiming allowable business expenses. These are the costs you pay to run your business that HMRC recognises as legitimate deductions. Knowing what you can and cannot claim is essential to avoid paying more tax than necessary or making mistakes in your Self Assessment return. This article explains what expenses CIS subcontractors can claim, how to record them, and how accountants help ensure you claim everything you are entitled to.

As a CIS subcontractor, you are classed as self employed and pay tax through the Self Assessment system. Under the Construction Industry Scheme, contractors deduct tax from your payments at 20% (or 30% if you are not registered). However, this deduction is based on your gross income, not your profit.

When you complete your tax return, you can claim back tax on your business expenses, reducing your taxable income and often securing a refund from HMRC.

What counts as an allowable expense

An expense is allowable if it is wholly and exclusively for business use. In other words, it must be necessary for your work and not for personal use. If a cost has both business and personal elements, you can only claim the business portion.

For example, if you use your mobile phone for both personal and work calls, you can only claim the percentage related to your business use.

Common expenses CIS subcontractors can claim

Below are some of the most common and legitimate expenses you can include when completing your Self Assessment return.

1. Tools and equipment

You can claim the cost of tools, machinery, and equipment used for your trade, such as drills, saws, or safety gear. If you buy expensive items that you use over several years, these are treated as capital expenses, and you may claim capital allowances instead of deducting the full cost in one go.

2. Protective clothing and uniforms

Specialist work clothing such as hard hats, steel toe boots, gloves, and high visibility jackets can be claimed as expenses. However, ordinary clothes that could be worn outside of work, like jeans or trainers, are not allowable.

3. Materials and supplies

You can claim materials purchased specifically for a job, including timber, cement, paint, and other consumables. These must be items you pay for and use as part of your construction work.

4. Vehicle and travel costs

If you use your vehicle for work, you can claim mileage or actual running costs.

  • Mileage method: Claim 45p per mile for the first 10,000 business miles each tax year and 25p per mile thereafter.

  • Actual cost method: Claim a portion of fuel, insurance, road tax, repairs, and servicing based on business use.

You can also claim parking fees, tolls, and public transport costs when travelling to temporary worksites. However, commuting between home and a permanent workplace is not allowable.

5. Business insurance

Insurance policies such as public liability insurance, professional indemnity insurance, or tool insurance are fully allowable expenses because they protect your business operations.

6. Accounting and professional fees

If you hire an accountant to manage your CIS tax return, bookkeeping, or payroll, you can claim their fees as business expenses. Fees for other professional services, such as legal advice related to your work, are also allowable.

7. Training and qualifications

Training costs are allowable if they help you maintain or improve existing skills related to your trade. For example, renewing a CSCS card or completing a safety course can be claimed. However, training for a completely new trade or career cannot be deducted.

8. Office and administration costs

If you have a home office or workspace, you can claim a portion of your household expenses, including:

  • Rent or mortgage interest.

  • Utilities such as electricity, heating, and water.

  • Internet and phone bills.
    HMRC allows a simplified flat rate based on the number of hours you work from home each month, or you can calculate the actual business percentage of your costs.

Stationery, postage, and office supplies like paper or printer ink are also claimable.

9. Advertising and marketing

You can claim the cost of promoting your services, such as creating a website, business cards, flyers, or online ads. Subscriptions to trade directories or advertising platforms are also allowable.

10. Bank charges and finance costs

If you have a dedicated business account, you can claim bank fees, overdraft charges, and interest on business loans or credit cards. Personal banking costs are not allowable.

11. Mobile phone and communication costs

If you use your mobile phone or internet for work, you can claim the business proportion of your bills. For instance, if 60% of your phone use is for business, you can claim 60% of the total cost.

12. Subscriptions and trade memberships

Membership fees for professional organisations or trade bodies, such as the Federation of Master Builders or a union, are allowable if they relate directly to your construction work.

Expenses you cannot claim

Some expenses are not allowable for tax purposes, even if they seem work related. These include:

  • Personal clothing and grooming.

  • Fines or penalties (such as parking tickets).

  • Travel between home and a permanent workplace.

  • Personal loans or credit card interest.

  • Entertainment or client hospitality.

HMRC disallows these because they are not considered necessary business expenses.

Keeping records for CIS expenses

To claim expenses, you must keep clear and accurate records throughout the year. HMRC can request proof of your claims, so you should retain:

  • Receipts or invoices for purchases.

  • Mileage logs or fuel receipts.

  • Bank statements showing payments.

  • Contractor payment and deduction statements.

It is best to use accounting software or an app to track expenses as you go. This avoids errors and makes your Self Assessment quicker to complete.

How accountants help CIS subcontractors with expenses

Accountants play a key role in helping subcontractors manage their CIS expenses effectively. They can:

  • Identify all allowable expenses to maximise your tax refund.

  • Record and categorise expenses correctly.

  • Complete and submit your Self Assessment accurately and on time.

  • Ensure compliance with HMRC rules to avoid penalties.

  • Use digital accounting tools to simplify record keeping.

An accountant’s expertise ensures you do not miss legitimate deductions or make claims that could lead to HMRC scrutiny.

Example in practice

A self employed plasterer earns £45,000 in a tax year and has £9,000 of CIS tax deducted by contractors. His accountant records £12,000 of allowable expenses for tools, travel, insurance, and materials. His taxable profit is reduced to £33,000, which means he is due a refund because his tax deductions exceed what he owes on that profit.

By working with an accountant, the plasterer receives his refund within three weeks of filing, instead of waiting months due to errors or missing information.

Conclusion

CIS subcontractors can claim a wide range of business expenses, including tools, travel, insurance, and professional fees. These deductions reduce taxable income and increase the likelihood of a refund.

To stay compliant, always keep records of your purchases and work-related costs. Working with an accountant helps you identify all allowable expenses, maintain accurate records, and file your tax return efficiently, ensuring you never pay more tax than you should.