You're Overpaying Tax: The HMRC Expenses Most CIS Subcontractors Ignore
Most subcontractors claim the obvious things — and leave the rest. That gap between what you're claiming and what HMRC allows is quietly costing you £160 to £336 a year in tax you never needed to pay.
The rule HMRC uses for business expenses is deceptively simple: the cost must be incurred "wholly and exclusively" for the purposes of your trade. In practice, that covers more than most subcontractors realise — and draws a firm line around things that look like work expenses but aren't.
The problem isn't that people are trying to claim things they shouldn't. It's that they're not claiming the things they clearly can. Under-claiming is money left with HMRC that was always yours. Over-claiming the wrong categories is what triggers a compliance check. The fix is knowing exactly where the line sits.
The Unclaimed Expense Gap
What missing £500–£800 in legitimate deductions actually costs you
What You Can Claim — and Exactly Why
These are the categories that HMRC explicitly allows for construction trades, and where most subcontractors are leaving money behind:
| Expense Category | What Qualifies | Common Mistake |
|---|---|---|
| PPE & Specialist Workwear 100% | Steel-toe boots, hi-vis, hard hats, branded workwear, gloves, safety glasses. Laundering costs for specialist gear. | Not claiming laundry costs. Buying work boots without keeping the receipt. |
| Tools & Equipment 100% | Purchase, repair, and replacement of tools used exclusively for work. Small tools claimed in full; larger equipment may be spread via capital allowances. | Not claiming tool replacement — people assume "it's just part of the job." |
| Mileage 45p/mile | Travel to temporary sites. HMRC's approved rate is 45p per mile for the first 10,000 miles, 25p thereafter. Applies to your own vehicle. | Claiming commute to a permanent site, or not keeping a mileage log at all. |
| CSCS Cards & Trade Tickets 100% | CSCS renewal, safety awareness tests, IPAF, PASMA, asbestos awareness, first aid renewals — anything required to work on site. | Assuming training costs aren't claimable because "the contractor should pay." |
| Phone & Data Partial | The business-use proportion of your monthly bill. If you use your phone 60% for work, 60% of the cost is deductible. | Claiming 100% when the phone is also personal use — HMRC will challenge this. |
| Home Office (Admin) £312/yr | HMRC flat rate: £10/month for 25+ hours of home working per month, up to £26/month for 101+ hours. No receipts required for the flat rate. | Not claiming at all because "I'm on site all day" — your invoicing and quotes count. |
| Accountancy Fees 100% | Your accountant's fee for Self Assessment, bookkeeping, or CIS advice is fully deductible as a business cost. | Forgetting to include it — the fee that saves you tax is itself tax-deductible. |
Piotr hasn't been claiming tools, his CSCS renewal, or his home office allowance. His actual annual spend on these:
- Tools replaced during the year: £280
- CSCS card + CPCS renewal: £180
- Home office flat rate (12 months): £120
- Workwear & PPE: £140
- Total unclaimed: £720
At 20% basic rate, that's £144 of unnecessary tax — paid because he didn't keep the receipts. If Piotr is above the higher-rate threshold, that same gap costs him £302.
What Will Trigger a Compliance Check
HMRC's data-matching is more sophisticated in 2026 than it has ever been. Unusual or inconsistent expense patterns are flagged automatically. These are the categories that most commonly cause problems:
The Difference Between Under-Claiming and Getting It Wrong
Both mistakes cost you — but in different ways. Under-claiming means you overpay tax every year and never get that money back unless you amend the return within four years. Getting it wrong — claiming things that don't qualify — risks a compliance check, a penalty, and repayment of the disallowed amount with interest.
The safest position is also the most profitable one: claim everything you legitimately can, keep receipts for everything, and don't claim anything you couldn't explain to an inspector with a receipt in hand.
Are you claiming everything you're owed?
Most subcontractors who review their expenses properly find they've been overpaying. A 30-minute tax review with a CIS specialist will show you exactly what you've missed and what you can reclaim from previous years.
Download Our Expense Checklist →Frequently Asked Questions
Business expenses · CIS subcontractors · HMRC rules 2026
What expenses can a CIS subcontractor claim on their Self Assessment?
CIS subcontractors can claim any cost incurred wholly and exclusively for business purposes. This includes: tools and equipment (purchase and replacement); PPE and branded workwear; mileage to temporary sites at 45p per mile; CSCS cards, trade tickets, and safety training renewals; the business-use proportion of your phone bill; accountancy fees; and a flat-rate home office allowance of up to £26/month. Every claim should be supported by a receipt or record. Missing any of these categories means overpaying tax you were never required to pay.
Can I claim work clothing as a CIS subcontractor?
Only if it qualifies as protective equipment or branded workwear. HMRC allows steel-toe boots, hi-vis vests, hard hats, safety gloves, and items embroidered or printed with your company name or logo. Standard clothing — jeans, work trousers, plain jackets — does not qualify because it could be worn outside of work (the "duality of purpose" rule). The test is whether the item would have a use outside your trade. If it would, HMRC will disallow it.
What is the 24-month rule for mileage claims?
HMRC's 24-month rule states that if you work at the same site for more than 24 continuous months, it is reclassified as a permanent workplace. From that point, travel costs to and from that site are treated as commuting — and commuting is not an allowable expense. The clock starts from your first day on site. Subcontractors on long-running contracts should note the date carefully: mileage claims become invalid once you cross the 24-month mark, and HMRC can recover previously claimed amounts if the rule is breached.
Can I claim back expenses from previous tax years I forgot to include?
Yes — HMRC allows you to amend a Self Assessment tax return within 12 months of the original filing deadline. For older years, you can submit an "overpayment relief" claim going back up to four tax years. If you've been consistently under-claiming expenses, the cumulative overpayment can be significant. A CIS-specialist accountant can review previous returns, identify unclaimed deductions, and submit corrections on your behalf.
Will claiming more expenses trigger an HMRC audit?
Claiming legitimate expenses correctly does not increase your audit risk — it reduces it. What triggers HMRC's automated flags is inconsistency: expense totals that are disproportionately large relative to income, categories that don't match your trade, or claims that appear in one year but not others without explanation. The safest approach is to claim everything you legitimately qualify for, keep every receipt, and be able to explain each line item clearly. Under-claiming looks like missed money. Over-claiming the wrong categories is what creates compliance risk.