Can CIS subcontractors claim tools and equipment?
Yes. A self-employed CIS subcontractor can potentially obtain tax relief for tools and equipment genuinely bought for the trade.
CIS itself does not determine whether the purchase is deductible. The normal self-employed tax rules apply when calculating taxable business profit.
Hand tools, power tools and other business equipment can potentially qualify. The way relief is given depends mainly on your accounting method, the type of asset and whether there is private use.
Which construction tools and equipment may qualify?
The exact items depend on your trade, but common examples can include:
Hand tools
Hammers, screwdrivers, spanners, chisels, trowels and other tools used in carrying out your trade.
Power tools
Drills, saws, grinders, breakers and other powered equipment needed for construction work.
Trade equipment
Specialist equipment genuinely required for your particular construction trade.
Tool storage
Qualifying toolboxes, storage systems and related business equipment may also be relevant.
Buying something that could theoretically be used on a building site does not make it deductible if it was actually bought for personal use.
How are tools treated under cash basis?
HMRC says that under cash basis, items of equipment other than specifically excluded assets are generally deducted like other business expenses when the qualifying amount is paid.
This means that for many sole-trader CIS subcontractors, the cost of qualifying tools and equipment bought and kept for the business can be included as a business expense rather than being dealt with through capital allowances.
£1,200 of qualifying power tools bought under cash basis
If the subcontractor pays £1,200 for qualifying equipment used wholly for the trade and the normal cash-basis conditions are satisfied, that payment may generally be included in cash-basis business expenses.
How are tools treated under traditional accounting?
Traditional accounting distinguishes between ordinary running expenses and capital expenditure.
HMRC says equipment and machinery bought and kept for the business are generally dealt with through capital allowances rather than deducting the full purchase cost as an ordinary expense.
The same piece of equipment may produce tax relief through a normal expense under cash basis but through capital allowances under traditional accounting.
What are capital allowances?
Capital allowances are a way of obtaining tax relief for qualifying capital assets used in a business.
For a self-employed subcontractor using traditional accounting, qualifying items can include:
- Tools.
- Machinery.
- Trade equipment.
- Computers and other business equipment.
- Some business vehicles.
You cannot claim the same cost as both an expense and a capital allowance
The accounting and capital-allowance rules determine how relief is given. A qualifying purchase should not be deducted twice.
Can CIS subcontractors claim tool repairs?
Repairs and maintenance of business equipment can generally be deductible where the work restores or maintains the existing asset rather than creating a separate new asset or major improvement.
Examples can include:
- Replacing worn components.
- Servicing business machinery.
- Repairing damaged power tools.
- Routine maintenance.
If the expenditure creates a substantially new or improved asset, the tax treatment may differ from an ordinary repair.
Can you claim replacement tools?
Yes, where replacement equipment is genuinely required for the business and the normal tax conditions are satisfied.
The tax treatment depends on the accounting basis in the same way as an original equipment purchase.
| Purchase | Typical tax treatment |
|---|---|
| Small qualifying tool under cash basis | Normally included in qualifying business expenses when paid. |
| Equipment under traditional accounting | Capital allowances may be available instead of an ordinary expense deduction. |
| Repair to existing equipment | Can generally be a business expense where it is a genuine repair or maintenance cost. |
| Personal tool | No deduction for the private element. |
What if tools are also used privately?
HMRC's general rule is that only business costs can be deducted.
If equipment is used for both the trade and privately, the tax treatment may need to reflect that private use.
£600 item with 80% business use
Business use: 80%
Business-related amount: £480
This is only a simplified illustration. The exact mechanism for restricting relief depends on the accounting method and tax treatment applying to the asset.
Can second-hand tools qualify?
Buying equipment second-hand does not by itself prevent tax relief.
What matters is whether the purchase is genuine, used for the business and satisfies the relevant expense or capital-allowance conditions.
If you buy used tools from an individual rather than a retailer, retain evidence of what was bought, the amount paid, date and seller wherever possible.
What if you already owned the tools before becoming self-employed?
Equipment owned before the business started can require separate consideration when it is introduced into the trade.
You should not simply claim the item's original historic purchase price as a current expense without considering the applicable pre-trading and capital rules.
Keep evidence of:
- When you originally bought the item.
- What it originally cost.
- When it began being used in the trade.
- Any private use.
What about tools bought on hire purchase or finance?
Equipment bought through hire purchase or another finance arrangement can have a more detailed tax treatment because the purchase cost and finance charges are not necessarily treated in exactly the same way.
HMRC's cash-basis guidance contains specific rules for equipment purchased by instalments and hire purchase.
Do not rely only on the monthly bank payment. Keep the agreement showing the equipment price, interest or finance charges and the payment schedule.
What happens if you sell business equipment?
Selling or disposing of equipment that has previously received tax relief can affect the business tax calculation.
The result depends on whether the item was dealt with through cash basis or capital allowances and the amount received on disposal.
Buying the tool is not the end of the tax record
Keep details of equipment sales, trade-ins and disposals so any required adjustment can be dealt with correctly.
CIS tools expense example
Tools reducing taxable business profit
Assume a qualifying CIS sole trader using cash basis has:
Other allowable expenses: £8,000
Qualifying tools paid for: £2,000
Illustrative business profit: £32,000
The tools reduce the business profit in this simplified example. The eventual tax position still depends on the wider Self Assessment calculation.
Can claiming tools increase a CIS tax refund?
Qualifying expenditure can reduce taxable business profit.
A lower taxable profit can reduce the Income Tax and relevant National Insurance due, which can affect the comparison between the final liability and CIS deductions already suffered.
CIS deductions are advance payments. Any repayment depends on your complete tax calculation and the deductions HMRC can verify.
Read our CIS Tax Refunds Guide for the year-end repayment process.
What records should you keep for tools and equipment?
Keep enough evidence to identify the equipment, what it cost and how it was used in the trade.
Keep purchase receipts
Retain invoices and receipts showing what was bought and the amount paid.
Record the business purpose
Make it clear which trade or business activity required the tool or equipment.
Record private use
Keep a reasonable basis for any business/private use restriction.
Keep repair records
Retain evidence distinguishing repairs from new equipment purchases or improvements.
Record disposals
Keep sale receipts and trade-in information when business equipment is sold or disposed of.
Reviewed & Updated
18 August 2026
2026/27
GO TAX REFUNDS
HM Revenue & Customs / GOV.UK
CIS does not create separate rules for deducting tools from taxable profit. The normal self-employed expense, cash-basis and capital-allowance rules apply according to the circumstances of the subcontractor and the asset.
CIS Tools & Equipment FAQs
Can CIS subcontractors claim tools?
Yes. Tools and equipment genuinely used for the self-employed trade can potentially qualify for tax relief under the normal business-expense or capital-allowance rules.
Can I claim power tools?
Qualifying power tools bought for the business can potentially be deductible. The way relief is given depends on your accounting method and the circumstances of the purchase.
Can I claim the full cost of tools under cash basis?
HMRC generally allows qualifying equipment other than excluded items such as cars to be treated as cash-basis business expenditure when paid, subject to the normal business-use conditions.
What if I use traditional accounting?
Equipment and machinery bought and kept for the business are generally dealt with through capital allowances rather than deducting the whole purchase price as an ordinary expense.
Can I claim repairs to my tools?
Genuine repairs and maintenance of business equipment can generally qualify. Creating or substantially improving an asset can be treated differently.
Can I claim second-hand tools?
Second-hand status does not itself prevent a claim. Keep evidence of what you bought, what you paid and how the item is used in the business.
What if I use the tool privately as well?
Private use can restrict the relief available. Only the appropriate business element should be reflected in the tax calculation.
Do tool expenses guarantee a CIS refund?
No. Qualifying tool costs can reduce taxable profit, but a CIS refund depends on the final tax calculation compared with the CIS deductions credited by HMRC.
HMRC & GOV.UK Sources
This guide is reviewed against current HMRC guidance covering self-employed equipment, cash basis, taxable profits and CIS.
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