CIS, self-assessment, tax codes. Stop losing money to HMRC confusion.
For sole traders, subbies and small ltd companies who want to pay the right tax, claim what they're entitled to, and keep the brown envelopes at bay.
UK construction tax is CIS on top of self-assessment on top of VAT on top of tax codes that half the time are wrong. These guides and calculators tell you what to set aside, what to claim, what HMRC's letter actually means, and when it's due.
Self-assessment — your first tax return
If you're self-employed, you need to file a Self-Assessment tax return by 31 January (online) or 31 October (paper). Register with HMRC as soon as you start working for yourself. Late registration means late filing penalties — even if you don't owe anything.
CIS — how it works and how to check your deductions
Under the Construction Industry Scheme, contractors deduct tax at source from subcontractor payments. The rate should be 20% if you're registered, 30% if you're not, and 0% if you have gross payment status. Check every CIS statement — errors are common.
Expenses you can claim — the full list
Tools, materials, PPE, van costs (mileage or actual, not both), phone, insurance, accountancy fees, training, protective clothing, and subsistence when working away from home. You cannot claim for commuting to your regular site or for ordinary clothing.
VAT — when you must register
You must register for VAT when your taxable turnover exceeds £90,000 in any rolling 12-month period (2026 threshold). Voluntary registration below this threshold can benefit you if most of your customers are VAT-registered. The domestic reverse charge applies to most construction services.
Making Tax Digital — what's changing
MTD for Income Tax Self-Assessment is being phased in. From April 2026, sole traders and landlords with income over £50,000 must use MTD-compatible software and submit quarterly updates. The threshold drops to £30,000 from April 2027.
HMRC investigation — what to do
Don't panic. HMRC investigations range from simple compliance checks to full enquiries. Get professional help immediately, be honest, provide what they ask for, and keep records of all correspondence. Penalties are lower if you cooperate.
Can't pay your tax bill — your options
Contact HMRC before the deadline. You can set up a Time to Pay arrangement for up to 12 months. Interest will be charged but penalties can be avoided if you act early. Don't ignore the bill — HMRC's powers include taking money directly from your bank account.
Pensions — what you should be doing
If you employ anyone, auto-enrolment is a legal requirement. If you're self-employed, no one is saving for your pension except you. Even £100/month from age 25 makes a significant difference. The state pension alone is £11,502/year (2026) — not enough to live on.