What Can You Claim on Expenses? A Guide for New Tradespeople

‍‌​​‌​​​‌‌​‌‌‌​​​​‌​‌​‌‌​​​‌​​‌​‌‍# S12. What you can claim back on expenses from day one

If you're self‑employed and don't claim expenses properly, you're working extra days a year for HMRC for free. You're taxed on profit, not turnover.

1. THE SHORT VERSION

You can claim costs that are wholly and exclusively for your business – tools, some travel, some phone, some home costs.

You can't claim your entire life as "business": everyday clothes, your commute to a permanent workplace, random personal spending.

Get the basics right from day one and tax time hurts less.

2. THE BIG RULE: "WHOLLY AND EXCLUSIVELY"

HMRC's test is simple but strict: the cost must be only for the business.

• If something is purely for work (e.g. a specific power tool, liability insurance), you can claim it in full.
• If it's mixed (phone, van, home), you work out a fair business share and only claim that part.
• If it's mostly personal with a bit of work mixed in, be careful – HMRC will not thank you for pushing it.

Ask: "Would I pay for this if I didn't run this business?" If no, you're probably in expense territory.

3. TOOLS, KIT AND EQUIPMENT (YOUR MAIN WIN)

Construction is tool‑heavy. Most of that spend helps cut your tax bill.

You can usually claim for:

• Hand tools – hammers, saws, trowels, chisels, levels, spanners, pliers.
• Power tools – drills, grinders, nail guns, breakers, saws, sanders, impact drivers.
• Tool storage – toolboxes, bags, van racking, site boxes, lock‑ups used for business.
• Replacement tools – when old ones wear out or get damaged.

On the tax side these can be treated as normal expenses or capital allowances depending on your accounting method, but your job is simple: keep the receipts and record the spend.

Tools bought before you actually started trading don't usually count. From your start date onwards, they do.

4. TRAVEL, FUEL AND GETTING TO SITE

This is where a lot of people over‑claim and get bitten.

You can usually claim:

• Travel between home and different temporary sites if your work is genuinely itinerant (moving between sites, no single fixed workplace).
• Travel between sites in the same day (job A to job B, yard to site, site to merchant and back).
• Fuel, parking, tolls, public transport for business journeys.
• Mileage using HMRC's flat rates (instead of actual running costs) if you choose that route.
• Overnight stays – hotel/B&B and reasonable meals when you genuinely have to stay away for work.

You generally can't claim:

• The daily commute to a long‑term, permanent site that is basically your normal workplace.
• Fines (parking, speeding). HMRC won't treat your bad parking as a business expense.

To keep HMRC happy, keep some kind of record: site, date, miles, or keep your fuel and travel receipts and a basic log.

5. CLOTHING AND PPE

HMRC is brutal on this.

You can usually claim:

• Protective clothing – safety boots you bought, hard hats, hi‑vis, overalls, waterproofs, gloves, goggles, face shields.
• Branded workwear/uniform – if it's clearly work‑only (logo'd polos, branded jackets).
• Laundry/cleaning for work‑only kit.

You can't claim:

• Normal clothes – jeans, generic hoodies, trainers – even if you only wear them on site.

If you could wear it down the pub and not look odd, HMRC will say it's not allowable.

6. VANS, CARS AND TRANSPORT COSTS

You've got two main ways to handle vehicles.

Option A - Mileage method

• Claim a flat rate per mile for business travel (covers fuel, tax, insurance, servicing, tyres).
• Simple: keep a mileage log, multiply miles by the HMRC rate.
• You don't also claim separate fuel, repairs etc. if you use this method.

Option B - Actual costs

• Track all vehicle costs (fuel, insurance, MOT, repairs, tax, breakdown cover) and claim a business‑use percentage.
• More accurate but more admin. Easy to abuse if you're not careful.

You can also claim:

• Hire/lease costs for vans used for business.

You still can't claim the personal parts – weekends away, school runs, supermarket trips.

7. OTHER COMMON EXPENSES YOU CAN CLAIM

The stuff people forget:

• Insurance – public liability, professional indemnity, van (business share), tool insurance.
• Phone and internet – a fair work share of your mobile and broadband.
• Accountant, bookkeeping, software – anything you pay to keep your books and tax straight.
• Office bits – stationery, printer ink, stamps, small office kit.
• Advertising and marketing – website, domain, hosting, flyers, business cards, van sign‑writing, online ads.
• Training – job‑related training and refresher courses (site safety, trade refreshers).
• Bank charges on a business account, some interest on business borrowing.

If the expense exists only because you run the business, it's usually in play.

8. HOME AS YOUR BASE (OFFICE AND STORAGE)

If you do quotes, paperwork, planning or tool storage at home, you can usually claim something.

Two main ways:

Simplified flat rate – use HMRC's flat monthly amount based on hours you work from home each month. Less precise, less hassle.

Actual cost split – claim a fair share of bills (heat, light, council tax, rent, broadband) based on how much space and time you use for business.

Be reasonable. One room part‑time won't justify half your rent.

9. CIS vs PAYE vs LTD - WHO THIS PAGE IS REALLY FOR

• Self‑employed / CIS sole trader – this is you. You claim expenses on your Self Assessment and use CIS statements as proof of tax already paid.
• Ltd company – similar expenses, but the company claims them, not you personally. You still keep records, your accountant does the rest.
• PAYE employee – much tighter rules. You can only claim specific job expenses you must pay yourself (e.g. some tools, some travel) and use different HMRC forms.

Don't mix systems. Know which route you're on before you start claiming.

10. EXAMPLE WEEK: HOW EXPENSES CHANGE WHAT YOU'RE TAXED ON

Rough, simple example for a CIS sole trader:

You're paid £1,200 this week (labour only). CIS at 20% – contractor deducts £240 and sends it to HMRC. You get £960 in your bank.

Now your expenses for that week:

• Fuel and parking to multiple sites: £80
• Tools bought for a specific job: £60
• Phone (work share): £10
• Work PPE you actually paid for: £20
• Total allowable expenses: £170

Your taxable profit for that week = £1,200 − £170 = £1,030.

At tax‑return time, HMRC looks at your total yearly profits, works out the tax/NI, then knocks off all the CIS you've already had deducted.

If you've been claiming expenses properly, your profit is lower, so your final tax bill is lower, and you're more likely to see a refund.

11. HMRC RED FLAGS (THINGS THAT GET LOOKED AT)

You want to be confident, not silly. Things that can attract attention:

• Huge fuel claims with no mileage records.
• Claiming all your clothes as workwear.
• Claiming your entire home as a business expense.
• "Training" expenses that are clearly not related to your trade or business.
• Travel claims that look like normal commuting to a single, long‑term workplace.

If you wouldn't be comfortable explaining it calmly, with receipts or a log, to someone at HMRC, don't claim it.

12. FROM DAY ONE: HABITS THAT STOP TAX SEASON BEING A NIGHTMARE

• Keep every receipt that smells like business – tools, fuel, parking, materials, training, insurance, phone, etc. Just photograph them if you're prone to losing paper.
• Write down your miles – date, where you went, miles. Doesn't have to be fancy, just consistent.
• Use one main account for business in/out so it's easier to see what's what.
• Don't wait till January to add it all up. Little and often beats a panic night with a shoebox.

WHAT TO DO NEXT

• Start photographing every business receipt today - tools, fuel, parking, materials, PPE.
• Set up a basic mileage log: date, where you went, miles driven.
• Open a separate bank account for business income and expenses if you have not already.
• Set aside 20-30% of each payment for tax before you spend anything.
• At the end of each month, add up your expenses so tax return time is painless.

SOURCES

• Income Tax (Trading and Other Income) Act 2005. https://www.legislation.gov.uk/ukpga/2005/5
• GOV.UK - Expenses if you are self-employed. https://www.gov.uk/expenses-if-youre-self-employed
• GOV.UK - Simplified expenses for the self-employed. https://www.gov.uk/simpler-income-tax-simplified-expenses

Common questions

What expenses can builders claim?

Any cost that is wholly and exclusively for the business. Tools, PPE, van, fuel, insurance, training, accountancy, phone. You can also claim a portion of home-office costs. You cannot claim ordinary clothing, food on a normal working day, or travel to a regular site. Keep receipts for at least 6 years.

Expense Checker tool.

How this site is funded →

Spotted something wrong or out of date? Email us at hello@kilnguides.co.uk.

In crisis? Samaritans 116 123 · Mental health support

How this site is funded →