CIS expenses guide for the 2025/26 and 2026/27 tax years
Every allowable expense lowers your taxable profit and raises your CIS refund. But the maths is not £1 for £1, and the mileage rate on the return you file by 31 January 2027 is not the new 55p. Here is the full list, with the numbers done properly.
By QuoteDone Editorial Team | Last updated: 30 September 2026 | Checked against GOV.UK guidance
Your CIS refund is the gap between what contractors deducted and the tax you actually owe. HMRC works out what you owe from your taxable profit: your income minus your allowable expenses. Every legitimate expense you leave off your return widens your profit and shrinks that gap.
Most guides stop there and tell you to "claim everything". That is half the picture. So ask yourself two questions before you file: do you know what one pound of expenses is actually worth to you, and are you about to use the wrong mileage rate? This guide answers both, lists every category you can claim, and walks through three worked examples you can check line by line.
Quick answer
CIS subcontractors can claim any cost that is wholly and exclusively for the business. The main ones:
- tools, equipment and consumables;
- business mileage (45p on the 2025/26 return, 55p from 6 April 2026) or actual vehicle costs;
- materials you paid for and were not reimbursed for;
- PPE and branded workwear;
- insurance, accountancy fees and bank charges;
- the business share of your phone and broadband;
- training and trade cards linked to your current trade.
At basic rate, each £1 claimed saves 26p of tax.
What £1 of Expenses Is Worth to You
For a sole trader with profit between £12,570 and £50,270, each extra £1 of profit costs 20p of Income Tax and 6p of Class 4 National Insurance. Take £1 of profit away with an allowable expense and you save 26p.
| Your taxable profit | Tax saved per £1 of expenses | What it means |
|---|---|---|
| Below £12,570 (no other income) | 0p | No Income Tax or Class 4 due. You already get back all CIS deducted. |
| £12,570 to £50,270 | 26p (20p tax + 6p Class 4) | Most CIS subcontractors sit here. |
Two practical conclusions follow. First, forgotten receipts cost real money: £1,000 of unclaimed tools is £260 left with HMRC. Second, buying a £500 drill "for the tax" saves £130 and still leaves you £370 down. Buy what the job needs, then claim every penny of it.
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The One Test Every Expense Must Pass
HMRC allows costs that are wholly and exclusively for your business. If something is used for both work and personal life, you can claim only the business share.
GOV.UK gives this example: if your phone bills total £200 for the year and £70 of that is business calls, you claim £70. The same logic applies to a car you also use at weekends, or home broadband the family shares. Pick a reasonable, consistent way to split the cost and keep a note of how you worked it out.
The Complete List of CIS Expenses
1. Tools and equipment
| Expense | Claimable? | Notes |
|---|---|---|
| Hand tools and power tools | ✓ Yes | Drills, saws, grinders, levels, tape measures, testers. |
| Consumables | ✓ Yes | Blades, bits, discs, fixings, sealant, adhesive. |
| Tool storage | ✓ Yes | Tool bags, boxes, belts, van racking. |
| Tool and plant hire | ✓ Yes | Access equipment, specialist machinery hired for a job. |
| Repairs and servicing of tools | ✓ Yes | Including calibration of test equipment. |
How tools are claimed: cash basis is now the standard method for sole traders. Under cash basis, you claim equipment you buy to keep and use in your business as a normal expense in the tax year you pay for it, whatever it costs. Cars are the only exception and go through capital allowances. If you have chosen traditional accounting, equipment goes through capital allowances instead. Source: GOV.UK: Cash basis, income and expenses.
2. Vehicle and travel
This is usually the biggest single expense on a CIS return, and the one with the most rules. You choose one of two methods for each vehicle.
| Simplified mileage (cars and vans) | 2025/26 return | 2026/27 onwards |
|---|---|---|
| First 10,000 business miles | 45p per mile | 55p per mile |
| Each business mile above 10,000 | 25p per mile | 25p per mile |
| Motorcycles | 24p per mile | 24p per mile |
Source: GOV.UK: Simplified expenses, vehicles.
| Travel expense | Claimable? | Notes |
|---|---|---|
| Actual vehicle costs (alternative to mileage) | ✓ Yes | Fuel, insurance, repairs, servicing, road tax, breakdown cover. Business share only. |
| Parking for business trips | ✓ Yes | Claimable on top of simplified mileage. |
| Train, bus and taxi fares | ✓ Yes | For business journeys. |
| Hotel rooms and meals on overnight business trips | ✓ Yes | Where the job requires you to stay away. |
| Travel between home and work | ✗ No | Ordinary commuting is not allowed. Travel to temporary sites is treated differently; see the 24-month rule guide below. |
| Fines | ✗ No | Parking and speeding fines are never allowable. |
Source: GOV.UK: Car, van and travel expenses.
3. Materials
| Expense | Claimable? | Notes |
|---|---|---|
| Materials you bought and were not reimbursed for | ✓ Yes | Timber, cement, cable, pipework, fixings supplied as part of a job. |
| Materials your contractor paid for or refunded | ✗ No | Claiming them would count the same cost twice. |
4. Clothing and PPE
| Expense | Claimable? | Notes |
|---|---|---|
| Protective clothing and PPE | ✓ Yes | Safety boots, hard hats, hi-vis, gloves, eye and ear protection, knee pads, harnesses. |
| Branded uniform | ✓ Yes | Workwear carrying your business name. |
| Everyday clothing worn to site | ✗ No | Jeans, T-shirts and hoodies are not allowable, even if you only wear them for work. |
5. Insurance
| Expense | Claimable? | Notes |
|---|---|---|
| Public liability insurance | ✓ Yes | Full cost. |
| Tools and equipment insurance | ✓ Yes | Full cost. |
| Professional indemnity insurance | ✓ Yes | Where your role requires it. |
| Vehicle insurance | ✓ Yes, with conditions | Business share, and only if you use actual costs rather than simplified mileage. |
6. Phone, broadband and working from home
| Expense | Claimable? | Notes |
|---|---|---|
| Business-only mobile | ✓ Yes | Full bill and handset. |
| Personal mobile used for work | ✓ Business share | Work out the business proportion from your bills. |
| Home broadband | ✓ Business share | Invoicing, email, admin. |
| Home office costs | ✓ Yes | Flat rate below, or a share of actual heating, electricity, Council Tax and mortgage interest or rent. |
| Hours worked at home per month | Flat rate per month |
|---|---|
| 25 to 50 | £10 |
| 51 to 100 | £18 |
| 101 and more | £26 |
The flat rate does not include phone or internet, so you can claim the business share of those on top. Source: GOV.UK: Simplified expenses, working from home.
7. Professional fees and bank charges
| Expense | Claimable? | Notes |
|---|---|---|
| Accountant or tax return fees | ✓ Yes | One of the most commonly forgotten. |
| Bookkeeping and invoicing software | ✓ Yes | Subscriptions used for the business. |
| Business bank account charges | ✓ Yes | Fees, transaction charges, overdraft interest. |
| Business legal fees | ✓ Yes | For example, chasing an unpaid invoice. Personal legal costs are not allowable. |
8. Training, cards and registrations
| Expense | Claimable? | Notes |
|---|---|---|
| Courses that improve skills you use now | ✓ Yes | Refreshers, working at height, first aid, asbestos awareness. |
| Training for changes in your industry | ✓ Yes | New skills linked to how your trade is changing. |
| Trade cards and registrations | ✓ Yes | For example, CSCS card renewal and annual scheme registrations needed to work. |
| Training to start a new business or move into an unrelated area | ✗ No | Must relate to your existing trade. |
Source: GOV.UK: Training courses.
9. Marketing and subscriptions
| Expense | Claimable? | Notes |
|---|---|---|
| Website, business cards, online adverts | ✓ Yes | Costs of finding work. |
| Trade body memberships and trade publications | ✓ Yes | Where directly related to your trade. |
| Client entertaining | ✗ No | Not allowable, even if it helps win work. |
7 Expenses CIS Subcontractors Most Often Forget
These rarely come with a big receipt, so they slip through. Run down the list before you file:
- Last year's accountant or tax return fee
- Parking and tolls, which you can add on top of simplified mileage
- Consumables bought in small amounts: blades, bits, fixings, sealant
- Your CSCS card renewal and any scheme registration fees
- The business share of your mobile and home broadband
- The working-from-home flat rate if you do 25+ hours of admin at home a month
- Tool insurance and public liability insurance
Mileage or Actual Costs: The Choice You Are Stuck With
For each vehicle you choose between simplified mileage and actual costs. The choice has lasting consequences:
- Once you use the flat rate for a vehicle, you must keep using it for as long as that vehicle is in your business.
- You cannot switch to the flat rate for a vehicle you have already claimed capital allowances on, or included as an expense when working out your profit.
- Under cash basis, a van you buy is an allowable expense. Claiming its cost upfront therefore rules out simplified mileage for that van.
Which method wins depends on your vehicle's price, running costs and miles. HMRC's simplified expenses checker compares both. If you are about to buy or lease a van, decide on the method first.
Three Worked Examples: Expenses in Pounds
All examples assume a registered subcontractor with CIS deducted at 20% on labour, no other income, Personal Allowance £12,570, Income Tax 20% and Class 4 NIC 6% on profits between £12,570 and £50,270.
Example 1: 2025/26 return, £40,000 labour, receipts-only vs full claim
Example 2: The same year's work in 2026/27, at 55p
Assumes the same thresholds and rates in 2026/27. Keep a dated mileage log from 6 April 2026 so the new rate is easy to support.
Example 3: Lower earner, £16,000 labour: where extra expenses stop helping
The extra £2,000 of expenses added only £371.80, because just £1,430 of it sat above the Personal Allowance. Any further expenses would add nothing.
What You Cannot Claim
- Commuting between home and a permanent workplace.
- Everyday clothing, even if worn only on site.
- Fines and penalties, including HMRC penalties.
- Client entertaining.
- Costs your contractor paid for or reimbursed.
- Personal spending taken from the business.
- Any expenses at all if you use the £1,000 trading allowance. It replaces expenses; you cannot have both.
Keep Records HMRC Will Accept: 2 Minutes a Week
- Photograph every receipt the day you get it. Save it to one folder per tax year (6 April to 5 April).
- Log business miles as you drive. Date, start and end point, purpose, miles. A dated log is what supports a mileage claim.
- Keep your monthly CIS statements with your receipts. You need both to file an accurate return.
- Note how you split mixed-use costs. One line explaining your phone or broadband percentage is enough.
- Keep everything at least 5 years after the 31 January deadline. For your 2025/26 return, that means until at least 31 January 2032.
Frequently Asked Questions
What expenses can CIS subcontractors claim?
You can claim costs that are wholly and exclusively for your business. For most CIS subcontractors that means tools and equipment, business mileage or actual vehicle costs, materials you paid for and were not reimbursed for, protective clothing and PPE, business insurance, the business share of your phone and broadband, accountancy fees, bank charges on a business account, and training that keeps your trade skills up to date.
What is the mileage rate for CIS subcontractors?
For cars and vans, the simplified expenses rate is 45p per mile for the first 10,000 business miles on your 2025/26 return, rising to 55p per mile from 6 April 2026 for the 2026/27 tax year. Miles above 10,000 are 25p in both years. The rate covers fuel, insurance, servicing and repairs, so you cannot claim those on top, but you can add parking and tolls.
Can I use the 55p mileage rate on my 2025/26 tax return?
No. The 55p rate applies to business miles driven from 6 April 2026, which fall in the 2026/27 tax year. Your 2025/26 return, due online by 31 January 2027, covers miles driven from 6 April 2025 to 5 April 2026, so the first 10,000 business miles on it are claimed at 45p.
Can I claim tools as a CIS subcontractor?
Yes. Under cash basis, which is the standard method for sole traders, you claim the cost of tools and equipment you buy to keep and use in your business as a normal expense in the tax year you pay for them. Cars are the exception and go through capital allowances. If you use traditional accounting instead, equipment is claimed through capital allowances.
Can I claim materials as a CIS subcontractor?
Yes, if you paid for them and your contractor did not reimburse you. Show materials as a separate line on your invoice so the contractor deducts CIS from labour only. On your tax return, include the full amount you were paid as income and claim the materials as an expense.
How much does each £1 of expenses add to my CIS refund?
If your profit is between £12,570 and £50,270, each £1 of allowable expenses cuts your tax bill by 26p: 20p of Income Tax and 6p of Class 4 National Insurance. If you have no other income and your profit falls below £12,570, extra expenses no longer increase your refund, because you already get back all the CIS tax deducted.
Can I claim expenses without receipts?
HMRC expects records that support every claim. Bank statements show that a payment was made, but a receipt or invoice shows what you bought. If a receipt is lost, ask the supplier for a copy and note what the purchase was for. Photographing receipts when you get them avoids the problem.
How long do I need to keep expense records?
At least 5 years after the 31 January submission deadline for the tax year. For your 2025/26 return, due by 31 January 2027, that means keeping records until at least 31 January 2032.
Important: This article is general information about HMRC rules for the 2025/26 and 2026/27 tax years, not personal tax advice. What you can claim depends on your circumstances and accounting method. Always verify against GOV.UK or speak to a qualified accountant before filing.
Author: QuoteDone Editorial Team | Last updated: 30 September 2026
Sources: GOV.UK: Expenses if you're self-employed · GOV.UK: Simplified expenses, vehicles · GOV.UK: Simplified expenses, working from home · GOV.UK: Cash basis · GOV.UK: Travel expenses · GOV.UK: Training courses · GOV.UK: Business records
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