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According to the Construction Industry Subcontractors (CIS) scheme, a subcontractor is a business that carries out construction work for a contractor - from site preparation to decoration. Usually, they are issued a monthly statement by their contractors to help with keeping accounts in check and filing tax returns.

With this in mind, what are some things you should know if you’re registered under CIS? What are your claimable expenses?

In this blog post, we explore an exhaustive list of allowable expenses for construction industry subcontractors to take note of:

What Are Your Claimable Expenses?

In terms of claiming certain types of CIS expenses in your tax return, there might be some confusion as to what’s allowable or not allowable.

We’ve put together a quick list - so you can cross-check them against your tax form easily:

CAN BE CLAIMED:

A. Business/ Travel Costs:

When commuting to work (*considering the vehicle is used exclusively for business use), you can claim costs incurred from petrol, maintenance and repairs, and road tax.

However, the amount of costs that can be claimed also depends on whether your business follows a fixed or actual rate of deduction.

*Home to work travel is not deductible if attendance at that workplace is 'regular and predictable'

*Speeding, parking and subsistence costs (stopping for a meal) are not allowed.

B. Tools/ Equipment:

One of the most apparent expenses claimable, you can check in costs incurred for small equipment (e.g. hand tools), repair and maintenance costs.

Quite simply, these costs include anything from materials you use onsite.

*Higher-value items of equipment with a two-year life or more (e.g. expensive drill) are generally capitalised.

C. Protective Uniform:

If you’re wearing compulsory protective clothing onsite (e.g. steel toe cap boots, trousers with reinforced knees, helmets), you’re able to claim these expenses.

Costs of cleaning these apparels - if you’re able to prove that cleaning equipment was used exclusively for this - can be claimable.

Also, costs incurred for uniforms imprinted with your business logo are allowable.

* Regular, everyday clothing worn to work CANNOT be claimed.

D. Administrative Costs:

Scouring the Internet for work-research purposes can be partially claimed - together with bills/expenses incurred from mobile phone usage (sending emails, answering work-related phone calls, etc.).

If you routinely print invoices, you can claim print, paper, stamps, ink or envelope costs in business.

E. Wages, salaries and other staff costs:

Hired other staff member(s) to assist in your work? After checking whether they are your employees or self-employed via the Employment Status test, you can claim gross wages or salary paid out to them.

If your staff are employees you need to operate Pay As You Earn and deduct tax and National Insurance. You will need to use Real-Time Information (RTI) to report to HMRC.

If you provide Benefits in Kind, the cost of those benefits and any Class 1A NIC will be tax-deductible. You may need to complete P11Ds to report benefits and reimbursed expenses

F. Bank, credit card and other financial charges:

If you’re able to prove that your bank or credit charges are exclusively business-related, these amounts are also claimable.

This is easiest when you already have a separate bank account designated for business transactions.

G. Advertising and business entertainment costs:

Whether you’ve run advertisements (print/digital) or set up a website, you can claim these expenses on your tax-return.

However, do ensure that your website-running costs are not capital (costs that create an enduring benefit) - as these are not allowable.

H. Rent, rates, power and insurance costs:

These costs typically include council tax, home/public liability insurance, utilities and water rate, mortgage interest and rent.

However, the type of costs that can be claimed depends on whether your business is claiming Flat (fixed rate) deductions or Actual costs.

Whilst flat rates can be claimed with no evidence, actual costs have to be calculated based on proportion.

I. Accountancy, legal and other professional fees:

Under this category, you can claim fees and subscriptions from professional body membership(s), trade association and accountancy fees.

We hope this was a comprehensive guide in helping you fill out your tax forms.

On another note, it’s soon time to submit your tax-return forms after 5th April! If you need further help, don’t hesitate to reach out to us - we offer professional and affordable services for CIS subcontractors from the fixed price of £95.

If you would like to enquire on more information – Right Accounts is here to help you with your needs.

You can contact us here.