The early starts, the long days on site, the constant battle with the British weather. If you’re a tradesperson in West Sussex, you know what hard work looks like. Whether you’re a builder in Burgess Hill, a plumber in Horsham, or an electrician in Crawley, your skills are in high demand.

But while you’re an expert at your trade, managing the financial side of the business can feel like a completely different job. Between confusing CIS deductions, tracking van costs, and figuring out what tools you can claim for, it’s easy to feel overwhelmed.

Too many tradespeople end up paying more tax than they need to, simply because they’re not claiming all their allowable expenses. At Curve Accountancy, we work with dozens of local tradesmen, and our goal is simple: to help you keep more of your hard-earned money.

This guide is your no-nonsense breakdown of tax for tradespeople. We’ll cover the essentials in plain English, so you can build a more profitable and sustainable business.

‍The Construction Industry Scheme (CIS) Explained in Plain English‍

For many subcontractors, the Construction Industry Scheme (CIS) is the biggest source of confusion. In simple terms, CIS is HMRC’s way of collecting tax from subcontractors throughout the year. Think of it as a form of advance payment towards your final tax and National Insurance bill.

Are you a Contractor or a Subcontractor?

• Contractor: You pay subcontractors for construction work.
• Subcontractor: You are paid by a contractor for construction work.

Many businesses are both. A builder in Crawley might be the main contractor on one job and a subcontractor for a larger firm on another.

How CIS Deductions Work

When a contractor pays you, they must first verify you with HMRC and will then deduct tax directly from your pay (excluding materials costs). The rate of deduction depends on your registration status:

• 20% Deduction: For subcontractors registered for CIS. This is the standard rate.
• 30% Deduction: For subcontractors who are not registered for CIS. This higher rate is a major penalty, so getting registered is essential.
• 0% Deduction (Gross Payment Status): If you meet certain criteria (related to turnover, tax history, and business processes), you can apply for Gross Payment Status. This means contractors pay you in full without any deductions, which is a huge boost for your cash flow.

The most important thing to remember is that these deductions are not the final tax you owe. At the end of the tax year, you must file a Self-Assessment tax return. This is where you declare your total income and, crucially, deduct all your allowable business expenses. The CIS deductions you’ve already paid are then taken off your final tax bill. For many tradespeople, this results in a tax rebate.

Your Van: Turning Your Biggest Tool into Your Biggest Tax Saver

Your van is more than just a vehicle; it’s your mobile office, your storeroom, and your most essential piece of equipment. It’s also one of your biggest opportunities to save on tax.

There are two ways you can claim expenses for your van:

1. The Simplified Method (Mileage Allowance)

This is the easiest option. You track the business miles you drive and claim a flat rate from HMRC. For vans, this is currently 45p per mile for the first 10,000 miles and 25p per mile thereafter.

• Pros: Simple to track, no need to keep fuel receipts.
• Cons: You might be missing out on claiming more, especially if your van has high running costs.

2. The Actual Costs Method

With this method, you claim a proportion of the actual running costs of your van. This requires more record-keeping but can often result in a larger tax deduction. You can claim for:

• Fuel
• Insurance
• Repairs and servicing
• Road tax (Vehicle Excise Duty)
• Parking

If you use the van for personal journeys too, you’ll need to calculate the percentage of business use and only claim that portion. For example, if 90% of your van’s use is for business, you can claim 90% of your total running costs.

What About Buying the Van Itself?

The cost of purchasing a van is a capital expense. Thanks to the Annual Investment Allowance (AIA), you can usually deduct the full cost of the van from your profits in the year you buy it. This provides a significant tax saving upfront.

Don’t Miss These: Other Essential Expenses for Tradespeople

Beyond CIS and your van, there are plenty of other day-to-day costs that you can and should be claiming to reduce your tax bill.

• Tools and Equipment: Small hand tools can usually be claimed as an everyday expense. Larger, more expensive pieces of equipment (like a cement mixer or specialist power tools) are treated as capital expenditure, and you can claim tax relief on them through the Annual Investment Allowance.
• Protective Clothing and Uniforms: You can claim for essential protective gear (steel-toed boots, hard hats, hi-vis jackets) and branded uniforms. You cannot, however, claim for everyday clothing like jeans or t-shirts, even if you wear them for work.
• Insurance: Public liability insurance is a must for most tradespeople and is fully tax-deductible. Don’t forget to claim for tool and van insurance too.
• Admin and Office Costs: Using part of your home as an office? You can claim a portion of your household bills. You can also claim for your mobile phone bill (business use percentage), stationery, postage, and subscriptions to accounting software like Xero or QuickBooks.
• Training and Professional Fees: Any courses you take to update your skills or gain new qualifications are allowable. You can also claim for subscriptions to trade bodies or professional organisations.

Real-World Example: A Horsham-Based Plumber

Let’s look at Dave, a self-employed plumber in Horsham.

• Total income invoiced: £60,000
• CIS deductions suffered (at 20%): £12,000
• Annual van running costs: £4,500 (90% business use)
• New tools purchased: £1,200
• Insurance, phone, and other admin costs: £1,800

Without claiming expenses, Dave’s profit looks high, and he might not get much of his £12,000 CIS deduction back.

Now, let’s add up his allowable expenses:

• Van Costs: £4,500 x 90% = £4,050
• Tools & Admin: £1,200 + £1,800 = £3,000
• Total Expenses: £7,050

By deducting these expenses, Dave’s taxable profit is significantly lower. This means his final tax and National Insurance bill is much smaller, and he is now due a substantial tax rebate from the £12,000 he has already paid via CIS.

Get a Grip on Your Numbers, Get Your Time Back

Being a great tradesperson is about skill, reliability, and reputation. Building a truly profitable business requires something more: a firm grip on your finances.

Don’t let the complexities of CIS or the hassle of tracking expenses stop you from keeping the money you’ve earned. With a clear system and the right advice, you can turn tax compliance from a headache into a business advantage.

Ready to make your finances simple and maximise your profit? Get in touch for a friendly, no-obligation chat today.