CIS self-employment has one big advantage over umbrella PAYE. You can claim business expenses. These expenses reduce your taxable income. You pay less tax at year end. But HMRC has specific rules. Not everything is claimable. Getting it wrong creates a compliance problem. This guide covers what you can and cannot claim.
How do CIS expense claims work?
CIS subcontractors are self-employed. They claim expenses through their self-assessment tax return. The expenses reduce gross income. This gives a net profit figure. Tax is on the net profit, not the gross.
Self-employed workers pay their own business costs. This is different from PAYE employment. HMRC allows a deduction for costs that are “wholly and exclusively” for business. The rules are stricter than some contractors expect.
HMRC does not review every claim upfront. But they can investigate past returns. They can ask for receipts at any time. Keep records for at least five years. Count from the January 31 filing deadline.
Travel and transport expenses
You can claim travel to different construction sites. This includes fuel, mileage, parking, train, and bus fares. The key rule is simple. Travel between sites is claimable. Daily commuting to the same fixed location is not.
HMRC looks at your “regular place of work.” A short contract at one site is fine. You move to another site after a few weeks. Travel to each site is claimable. But going to the same site every day for a year is different. That site becomes a regular workplace. The commuting test applies.
HMRC has guidance on temporary workplaces. A workplace is “temporary” if your contract lasts 24 months or less. It must not become your regular workplace before the end of that period.
Mileage rates for 2026-27: 45p per mile for the first 10,000 business miles. Then 25p per mile after that. These are HMRC’s approved mileage rates for self-employed workers.
Tools and equipment
You can claim tools you buy for work. You can claim small tools under £500 as revenue expenses. Claim them in the year you buy them. Larger equipment like vans, plant hire, and machinery is different. You may need to claim these through capital allowances.
Claimable tools include hand tools, power tools, and specialist equipment you own. You must use them for work. A tool with both personal and business use is tricky. You can only claim the business part.
If someone steals your tools on site, you may claim the loss. But you need the police reference number. You also need proof of the original purchase.
Protective clothing and workwear
You can claim specialist protective clothing for construction work. This includes hard hats, steel-capped boots, hi-vis vests, and safety gloves. Ordinary clothing is different. You cannot claim it even if you wear it only for work. The clothing must be clearly protective gear.
HMRC’s rule is clear. Functional protective clothing with a safety purpose qualifies. General work clothes do not qualify. This is true even if you only buy them for work. The test is simple. Can you wear the clothes socially? If yes, you cannot claim them.
If your employer or client gives you protective clothing, do not claim the same items. That would be double-claiming.
Materials
You can claim materials you supply for your work. But handle them carefully. Materials you invoice for are already excluded from CIS deductions. The contractor does not deduct CIS on materials. But you still need to claim them correctly. Claim them as a business expense on self-assessment.
The materials cost reduces your net profit. It works the same as any other expense. But the materials figure on your CIS statements must match your receipts. Keep supplier invoices for everything.
Training and professional development
You can claim training that maintains your current skills. Training that updates your skills is also claimable. But training for a different trade is not claimable. HMRC treats that as personal development. It is not a business expense.
Here is an example. A scaffolder takes an updated working-at-heights course. This maintains current skills. It is claimable. A scaffolder takes a course to become a plumber. This is a career change. It is not claimable.
You can also claim professional memberships related to your trade.
Phone and internet
You can claim the business part of your phone cost. This includes arranging work, contacting contractors, and site management. If you use the phone for both personal and business, you can only claim the business percentage.
Keep records of how you use the phone. A call log helps. An estimate of business versus personal use also helps. HMRC may ask for this.
How do you claim expenses?
You enter your expenses on your self-assessment return. Put them under “self-employment expenses.” They reduce your taxable profit. Always keep receipts. HMRC can ask for evidence. They can go back five years from the 31 January filing date.
See self-assessment for CIS subcontractors for the full self-assessment filing process. It includes where expenses go on the return.
What about umbrella PAYE and expenses?
Umbrella contractors face much stricter expense rules. The SDC test blocks most travel and subsistence claims. You cannot claim these for your regular workplace. A compliant umbrella company still processes legitimate expenses correctly. But the range of claimable costs is much narrower. CIS self-employment allows more.
This is one reason CIS subcontractors often come out ahead. They have high tool and travel costs. Their take-home pay is higher than umbrella PAYE.
Contact the CIS payroll service for help with CIS expenses and self-assessment.
Frequently Asked Questions
What travel expenses can CIS subcontractors claim?
Travel between different construction sites is generally claimable. This includes mileage at 45p per mile for the first 10,000 miles. It also includes parking and public transport. Daily commuting to the same fixed site is not claimable. This applies once the site becomes a regular workplace.
Can CIS subcontractors claim tools as expenses?
Yes. You can claim tools bought for work. Claim small tools as revenue expenses in the year you buy them. Larger equipment may need capital allowances. The tools must be for work use only. They cannot be for personal use.
Is protective clothing claimable for CIS workers?
Yes. Functional protective clothing is claimable. This includes hard hats, steel-capped boots, hi-vis vests, and safety gloves. General work clothes are not claimable. This is true even if you only buy them for work. The test is whether you can wear them socially.
How do CIS subcontractors claim expenses?
You claim through the self-assessment tax return. Put them under “self-employment expenses.” Expenses reduce your taxable profit. Keep all receipts for at least five years. Count from the 31 January filing deadline.
Can CIS subcontractors claim the same expenses as umbrella PAYE workers?
No. CIS self-employment expense rules are much more flexible. Umbrella contractors face the SDC test. This test blocks most travel and subsistence claims. CIS allows genuine business travel. It also allows materials, tools, and protective clothing.
