What construction expenses can builders claim

I recently heard a story about a builder who had been buying his own tools for three years without realising he could claim them against his tax. He’d missed out on hundreds of pounds in tax relief simply because he didn’t know what expenses were allowable. If you’re working in construction, understanding what you can legitimately claim could save you thousands each year.

Here’s everything you need to know about claiming construction expenses in 2025/26.

Tools and equipment you use on site

This is where many builders leave money on the table. Every tool you buy for work is a legitimate business expense, from your basic hand tools to major power equipment.

You can claim for:

• Hand tools (hammers, saws, trowels, chisels, levels, tape measures)
• Power tools (drills, grinders, nail guns, circular saws, sanders)
• Testing equipment (moisture meters, laser levels, thermal imaging cameras)
• Tool storage (site boxes, van racking, tool bags)
• Replacement tools when they wear out or get damaged

Vehicle costs: choosing the right method

Getting your vehicle expenses right can make a substantial difference to your tax bill. You’ve got two options, and picking the wrong one could cost you.

Option 1: Actual costs method

Track all your vehicle expenses and claim the business-use percentage:

• Fuel for business journeys
• Vehicle insurance
• Repairs and servicing
• MOT and road tax
• Vehicle finance or lease payments
• Even those times you put the van through the carwash

If your van is used 80% for business, you claim 80% of all these costs. Keep a mileage log showing business vs personal journeys to support your claim.

Option 2: Simplified mileage rate

Claim 45p per mile for the first 10,000 business miles, then 25p per mile after that. This covers fuel, insurance, repairs, and depreciation in one simple rate.

Which should you choose? If you drive a lot and have an older, cheaper vehicle, the mileage rate often works out better. If you’ve got an expensive van with high running costs, the actual costs method typically gives a bigger claim. We can help you calculate which option saves you more.

Materials and supplies

This seems obvious, but there are some items builders can overlook. You can claim for:

• Building materials purchased for specific jobs
• Small materials and consumables you keep in stock
• Cleaning supplies and site welfare items such as first aid kits
• Fixings, screws, nails, adhesives

Safety equipment and workwear

Your personal protective equipment and work clothing are fully claimable, including:

• Hi-vis jackets and vests
• Hard hats and bump caps
• Safety boots and steel toe caps
• Protective gloves and goggles
• Knee pads and back supports
• Dust masks and respirators
• Ear defenders
• Harnesses and lanyards for working at height

Regular clothing isn’t claimable, even if you only wear it for work. Those jeans and t-shirts don’t count. But your steel toe caps, site boots, and hi-vis definitely do.

Plant hire and equipment rental

When you hire equipment rather than buying it, these costs are fully allowable:

• Scaffolding hire
• Digger and machinery rental
• Concrete mixer hire
• Access equipment (cherry pickers, scissor lifts)
• Temporary lighting and generators
• Welfare units and site toilets

Keep all your hire invoices organised by job or by month. These can add up to substantial sums over a year, so don’t lose track of them.

Subcontractor payments

If you use subcontractors, their payments are business expenses. However, be careful with the Construction Industry Scheme (CIS) implications. You’ll need to:

• Register as a contractor with HMRC if you use subcontractors
• Verify each subcontractor’s CIS status
• Deduct the appropriate CIS tax (usually 20%) unless they’re gross payment status
• Submit monthly CIS returns to HMRC
• Keep records of all payments and deductions

The amount you claim as an expense is the gross payment before CIS deductions, not just what you paid them net. A common mistake is only claiming the net amount, which means you’re overpaying tax. Of course, if you work with us, we’ll take care of all of this for you.

Professional fees and memberships

Don’t overlook these often-forgotten expenses:

• Accountancy fees (including what you pay us!)
• Trade association memberships (FMB, NFBC)
• Professional subscriptions and qualifications
• Health and safety consultancy
• Legal fees for business matters
• Insurance broker fees

One roofer in Sevenoaks recently asked whether his FMB membership was claimable. Absolutely it is, and at £500 annually, that’s a tax saving of around £100 he’d been missing.

Insurance costs

All business insurance is claimable:

• Public liability insurance
• Employers’ liability insurance (if you have employees)
• Professional indemnity insurance
• Tools and equipment insurance
• Van insurance (business portion)
• Business interruption insurance

If your van insurance covers both business and personal use, you can only claim the business percentage. Keep this consistent with how you’re claiming vehicle expenses.

Phone and internet costs

If you use your mobile for work calls and your home internet for business emails and admin, you can claim a proportion of these costs. Be realistic about the business percentage. If you’re using your phone 60% for business calls and messages, claim 60% of the bill.

Many builders miss claiming their mobile contracts altogether. If you’re paying £40 monthly and using it half for business, that’s £240 in tax relief you’re leaving unclaimed each year.

Training and professional development

Improving your skills and qualifications is claimable:

• CSCS card renewals
• Health and safety courses
• New trade skill training (if related to your existing trade)
• First aid at work courses
• Tool and equipment training
• NVQ and City & Guilds qualifications related to your trade

Be aware that training for a completely new trade (diversifying into something totally different) might not be allowable. But advancing your existing skills definitely is.

Marketing and advertising

Getting your name out there costs money, and these costs are claimable:

• Van signwriting and graphics
• Website design and hosting
• Business cards and leaflets
• Local newspaper or magazine advertising
• Online advertising (Google, Facebook)
• Sign boards for sites
• Branded workwear with your logo

A roofer in Bexleyheath spent £800 on van signwriting last year. Not only did it bring in more work, but it also reduced his tax bill by roughly £160.

Less obvious expenses builders often miss

Here are some expenses that builders frequently overlook:

• Parking charges when visiting sites or meeting clients
• Congestion charges and toll fees for business journeys
• Bank charges on your business account
• Subscription to trade magazines
• Site photographs for records or marketing
• Waste disposal and skip hire
• Water and electricity used on site (if you’re paying directly)

Record keeping: protecting your claims

HMRC can challenge any expense claim you make, so proper records are essential. Keep:

• All receipts and invoices (photograph them immediately on your phone)
• Bank and credit card statements showing the payments
• A brief note of business purpose for larger expenses
• A mileage log if claiming vehicle costs
• Records for at least six years

Cloud accounting software like Xero or QuickBooks makes this much easier. You can photograph receipts on site and they’re automatically stored and categorised. Many of our construction clients find this saves hours compared to keeping paper records in the van.

What you definitely cannot claim

To save you from making costly mistakes, here’s what’s not allowable:

• Everyday clothing (jeans, t-shirts, trainers)
• Fines and parking tickets
• Client entertaining (taking a customer for lunch)
• Personal purchases, even if paid from your business account
• Payments to yourself as a sole trader (you’re not an employee)
• Regular personal motor insurance if you’re claiming business mileage rate

Getting help with your expenses

The construction industry has specific tax rules around CIS, expenses, and VAT that can get complicated quickly. Making mistakes with your expense claims can lead to unexpected tax bills or penalties from HMRC, whilst missing legitimate claims means you’re paying more tax than necessary.

Of course, there are all sorts of other allowable deductions, so grab a copy of our handy tax deductible expenses guide to make sure you’re claiming everything you’re entitled to.

At Adams Accountancy, we love working with construction businesses across Kent. We understand the specific challenges builders face with CIS, expense claims, and tax planning. Our friendly team can help ensure you’re claiming everything you’re entitled to whilst staying fully compliant with HMRC.

Contact us today for a free, no-obligation chat about your construction business finances. Check out our recommendations and see what our clients say about us.

About the author

Michelle Adams is a qualified accountant and director at Adams Accountancy, with over 15 years of experience helping small businesses across Kent navigate tax compliance and expense claims. Her team specialises in working with construction businesses, understanding the unique challenges builders face with CIS, irregular income, and complex expense tracking.

Frequently asked questions about construction expenses

Can I claim for tools I bought before I started my business?

No, you can only claim for tools purchased after you began trading. If you bought tools whilst employed and then started your own business, those tools don’t qualify. However, any tools purchased from the date you registered as self-employed onwards are claimable.

What if I use my van for both work and personal trips?

You need to separate business and personal use. Keep a mileage log showing which journeys were for work. If you’re using the actual costs method, only claim the business percentage of all vehicle costs. If you’re using mileage rates, only claim business miles at 45p per mile (first 10,000 miles) then 25p per mile after that.

Can I claim for buying lunch while working on site?

Generally no. Everyday food and drink isn’t an allowable expense because HMRC considers these personal costs you’d have anyway. However, if you’re working away from home overnight and need to buy evening meals and accommodation, those subsistence costs may be claimable.

Do I need to keep the actual receipts or are photos acceptable?

Digital copies (photographs) of receipts are perfectly acceptable for HMRC. In fact, photographing receipts immediately is often better than keeping paper copies that can fade, get damaged in your van, or be accidentally thrown away. Just ensure the images are clear and legible.

Can I claim expenses if I’m working through an umbrella company or agency?

This depends on your specific arrangement. If you’re paid through PAYE by an umbrella company, you typically can’t claim business expenses in the same way self-employed traders can. However, you may be able to claim tax relief on some costs through your Self-Assessment return. Speak to your accountant about your specific situation.

What happens if HMRC investigates and I can’t prove an expense?

Without adequate records, HMRC can disallow the expense claim. You’ll need to pay the tax you originally saved, plus potential interest and penalties. This is why keeping good records is so important. If you’re unsure whether you have sufficient evidence for an expense claim, it’s better to ask your accountant before submitting your tax return rather than dealing with an investigation later.