How do allowable expenses work for CIS subcontractors?
A CIS subcontractor who operates as a sole trader is still self-employed for tax purposes. That means the normal self-employed business-expense rules are used when calculating taxable trading profit.
Broadly, qualifying business costs are deducted from business income to work out taxable profit. Personal costs and other specifically excluded expenditure are not deductible.
CIS affects how contractors may deduct tax from payments to you. It does not mean every cost connected with construction work automatically becomes an allowable expense.
Which expenses can CIS subcontractors potentially claim?
Depending on your trade and circumstances, common categories can include qualifying:
Tools & equipment
Tools, machinery and equipment genuinely required for the business can potentially be deductible under the applicable accounting rules.
Business travel
Qualifying mileage, fuel, public transport, parking and other business travel costs may be relevant.
Protective clothing
PPE and protective clothing required for the work may qualify, unlike ordinary everyday clothing.
Materials
Materials and goods bought for the trade can potentially be deductible where they form part of the business costs.
Phone & office
Business phone, internet, stationery and office costs may qualify to the extent they relate to the trade.
Insurance & professional fees
Qualifying business insurance and professional costs can potentially be deducted.
Can CIS subcontractors claim tools and equipment?
Tools and equipment genuinely bought for the business can potentially be deductible.
The exact treatment depends on matters such as the type of asset and whether you use cash basis or traditional accounting.
Examples might include:
- Hand tools.
- Power tools.
- Tool storage.
- Work equipment.
- Repairs and maintenance of business equipment.
If an item is also used personally, you cannot automatically treat all of the cost as a business deduction.
Can CIS subcontractors claim mileage and travel?
Qualifying business travel can potentially be deducted. HMRC's general self-employed guidance includes costs such as fuel, parking, public transport, taxis and hotel rooms where the travel qualifies as business travel.
However, HMRC excludes non-business travel and travel between home and work from the general allowable-travel list.
Working on different sites does not make every journey automatically deductible
The nature of the trade, where it is carried on and the pattern of travel matter. Keep records showing why each journey was undertaken for the business.
What vehicle expenses may qualify?
Depending on the method used, qualifying vehicle costs can potentially include items such as:
- Fuel.
- Insurance.
- Repairs and servicing.
- Vehicle tax.
- Breakdown cover.
- Hire charges.
- Business parking.
Some self-employed businesses can use simplified mileage expenses instead of claiming the actual running costs of an eligible vehicle.
Where a simplified mileage method is used, the mileage rate replaces the relevant vehicle running costs covered by that method.
Can you claim workwear and PPE?
HMRC allows self-employed businesses to claim qualifying uniforms and protective clothing needed for work.
For construction trades, this can potentially include genuine protective items required because of the work being carried out.
| Item | General position |
|---|---|
| Protective clothing | Can potentially qualify where it is needed for the work. |
| Uniform | Can potentially qualify under HMRC's clothing rules. |
| Ordinary jeans or T-shirts | Everyday clothing is not deductible simply because it is worn while working. |
Can a CIS subcontractor claim materials?
Materials bought for use in the trade can form part of allowable business costs where the normal tax rules are satisfied.
Examples might include consumable materials, components and supplies purchased to complete construction work for customers.
Invoices and receipts should show the materials purchased and help establish that they were genuine business costs.
Can you claim mobile phone and internet costs?
HMRC includes phone, mobile and internet bills among potentially allowable office costs for self-employed businesses.
If the same phone or broadband connection is also used privately, only the appropriate business element should normally be claimed.
Can CIS subcontractors claim insurance and professional fees?
Qualifying business insurance and professional expenses may also be deductible.
Depending on the circumstances, this might include:
- Business insurance.
- Professional indemnity insurance.
- Accountancy costs relating to the business.
- Qualifying legal and professional fees.
- Business banking or finance charges where allowable.
Can you claim meals and accommodation?
Hotel rooms and meals on qualifying overnight business trips can potentially be allowable under HMRC's general self-employed travel rules.
Ordinary food and drink during a normal working day should not be assumed to qualify simply because you are working on a construction site.
Food is normally a personal living cost, so the circumstances of the business journey matter when deciding whether a meal can be deducted.
What if an expense is partly personal?
Where a cost has both business and private use, you generally need a reasonable method for identifying the business portion.
Examples could include:
- A mobile phone used for work and personal calls.
- A vehicle used for business and private journeys.
- Equipment also used outside the trade.
- Home internet used by the household as well as the business.
Paying for something personally does not stop it being a business cost — and paying from a business account does not make a private cost allowable
The purpose and use of the expense matter more than which bank account or card was used to pay it.
Are materials treated differently when CIS deductions are calculated?
Yes. There is an important distinction between the CIS deduction calculation made by the contractor and the subcontractor's own year-end business expense calculation.
Under CIS, the contractor considers qualifying direct material costs when working out the amount from which the CIS deduction is made.
That does not replace your bookkeeping or the normal tax rules determining whether the materials are allowable business expenses when calculating taxable profit.
A material cost shown in a CIS payment calculation and a material cost claimed in your business accounts relate to different parts of the tax process. Keep clear records for both.
CIS allowable-expense example
Turning turnover into taxable business profit
Suppose a CIS subcontractor has £45,000 of business income for the year and £12,000 of allowable business expenses.
Allowable expenses: £12,000
Illustrative business profit: £33,000
The £33,000 figure is the business profit before considering the person's wider tax calculation, allowances and other relevant matters.
How do allowable expenses affect a CIS tax refund?
Allowable expenses can reduce taxable business profit. That can reduce the Income Tax and relevant National Insurance ultimately due.
HMRC then gives credit for CIS deductions already made by contractors when calculating the sole trader's final position.
Expenses can affect the calculation, but they do not guarantee a repayment
A subcontractor receives a repayment only where the final tax calculation leaves an excess after the relevant CIS deductions and other tax credits are taken into account.
See our CIS Tax Refunds Guide for the full repayment process.
What expense records should CIS subcontractors keep?
Keep enough evidence to establish both what you paid and why the expense relates to the business.
Keep receipts and invoices
Retain supplier invoices, receipts and other documents supporting business purchases.
Record business travel
Keep mileage logs, tickets and information showing the purpose of qualifying journeys.
Record mixed-use calculations
Keep the basis used to separate business and personal use for vehicles, phones and other mixed expenses.
Keep CIS statements separately
Your contractor deduction statements support the CIS tax credit and should not be confused with ordinary expense receipts.
Reviewed & Updated
18 August 2026
2026/27
GO TAX REFUNDS
HM Revenue & Customs / GOV.UK
CIS does not create a blanket right to deduct construction costs. Whether an expense is allowable depends on the normal self-employed tax rules, the purpose of the expenditure and any private use or specific restriction that applies.
CIS Allowable Expense FAQs
Can CIS subcontractors claim business expenses?
Yes. A self-employed CIS subcontractor can claim qualifying business expenses under the normal self-employed tax rules when calculating taxable profit.
Can I claim tools under CIS?
Tools and equipment genuinely required for the trade can potentially qualify, although the exact treatment depends on the type of purchase and accounting basis used.
Can I claim mileage to construction sites?
Qualifying business travel can potentially be deductible, but travel treatment is fact-specific. Ordinary home-to-work travel is excluded by HMRC's general self-employed travel guidance.
Can I claim work boots and protective clothing?
Genuine protective clothing required for the work can potentially qualify. Ordinary everyday clothing does not become deductible simply because it is worn at work.
Can I claim materials?
Materials genuinely purchased for the trade can potentially form part of allowable business costs. Keep invoices and receipts supporting the purchase.
Do expenses guarantee a CIS refund?
No. Expenses reduce taxable profit where allowable. A CIS repayment depends on the final tax liability compared with the CIS deductions and other tax already paid.
Are CIS material deductions the same as tax expenses?
No. Materials considered when a contractor calculates a CIS deduction and materials recorded as costs in your own accounts form part of different calculations.
HMRC & GOV.UK Sources
This guide is reviewed against current HMRC guidance covering CIS and self-employed business expenses.
Not sure which CIS expenses you can claim?
Go Tax Refunds can help review your CIS income, tools, travel, materials and other business costs to identify the expenses relevant to your Self Assessment position.
Get CIS Tax Support