The Invisible Profit Killer: Mastering Mileage Claims as a CIS Subcontractor in 2026
For most CIS subcontractors, van running costs are one of the largest overheads — yet also one of the most poorly tracked. Every business mile you fail to record and claim is money left on the table. Proper mileage claims can easily save you £800–£2,000+ per year in tax.
Why Travel to Site Is Often Deductible
HMRC allows you to claim travel expenses to a temporary workplace. A site is usually temporary if you expect to work there for less than 24 months. Travel to a permanent workplace (your normal base or a site you attend long-term) counts as non-deductible ordinary commuting.
The 24-Month Rule and the 40% Test
Even if a contract is expected to last under 24 months, if you spend 40% or more of your working time at one location over a continuous period, HMRC may treat it as a permanent workplace. Always assess each site individually.
HMRC Approved Mileage Rates (2026/27)
When using your own vehicle, you can claim using simplified mileage rates (covers fuel, insurance, servicing, MOT, repairs and depreciation):
- 45p per mile for the first 10,000 business miles in the tax year
- 25p per mile for every mile over 10,000
- +5p per mile per passenger (only for other employees or subcontractors travelling for business)
Real-World Savings Example
A subcontractor driving 12,000 business miles per year:
- 10,000 miles × 45p = £4,500
- 2,000 miles × 25p = £500
- Total claim: £5,000
At a 20% tax rate, this saves you **£1,000** in tax. Without a proper mileage log, this deduction disappears.
Mileage Allowance vs Actual Costs – Choose Wisely
You have two options, but you must generally stick with one method for the entire life of the vehicle:
- Mileage rates (simplified expenses) – Easier, less paperwork. Best for older vans or lower running costs.
- Actual costs – Claim real fuel, repairs, insurance, road tax + capital allowances. Often better for new, expensive vans with high costs, but requires every receipt.
Practical Checklist for CIS Subcontractors
- Log every business trip: date, start and end mileage, destination, and purpose.
- Use a dedicated app (e.g. MileIQ, Driversnote) – digital records are much harder for HMRC to challenge.
- Photograph your odometer on 6 April each year to record total annual mileage.
- Strictly separate business from private mileage (supermarket runs, school drops etc. do not count).
- Keep supporting evidence: site sign-in sheets, delivery notes, or job sheets proving you were on site.
The Risk of Estimating or Rounding Up
HMRC actively reviews high travel claims in the construction sector. If you cannot produce a credible mileage log, they can disallow the entire expense, demand repayment, and add penalties for careless behaviour. Never guess or round up figures.
What to Do Now
Start logging mileage today. If you’ve missed records for the current tax year, reconstruct them using diaries, Google Maps timeline, or fuel receipts. Make sure your next Self Assessment includes every legitimate business mile — it’s one of the easiest and most effective ways to protect your profits.