Construction Industry Self Assessment

If you are self-employed in the UK construction industry or working under the Construction Industry Scheme (CIS), understanding your tax and Self Assessment obligations is essential to keep your business compliant and financially organised.

Whether you’re new to the industry or an experienced contractor, tax can feel complex—especially when CIS deductions are involved.

Requirement

All self-employed individuals must submit a Self Assessment tax return to HMRC each tax year (running from 6 April to 5 April). The deadline for submission and payment is 31 January following the end of the tax year.

As of 6th April 2026, if your annual income is over £50,000 you are required to file quarterly.

If you are working under CIS, this requirement still applies in full.

In addition, future changes under HMRC’s Making Tax Digital programme may introduce more frequent reporting requirements for some taxpayers, depending on income levels and business structure.

 

Income Tax

You are taxed on your profits, which is your income minus allowable expenses.

For the 2025/26 tax year (typical structure):

  • 20% basic rate on income between £12,570 and £50,270
  • Higher rates apply to income above this threshold

 

National Insurance Contributions (NICs)

ISelf-employed individuals typically pay:

  • Class 2 NICs (flat weekly amount, where applicable)
  • Class 4 NICs:
    • 6% on profits between £12,571 and £50,270
    • 2% on profits above £50,270 (rates may vary by tax year)

Construction Industry Scheme (CIS)

CIS is designed to reduce tax evasion in the construction sector and ensures tax is collected at source.

  • Registered CIS subcontractors: 20% deduction from payments
  • Unregistered subcontractors: 30% deduction

Even with CIS deductions taken at source, you must still complete a Self Assessment, as your final tax position may include:

  • Other income sources
  • Additional earnings from agencies or umbrella companies
  • Allowable expenses and adjustments

Your final tax return calculates your total tax liability, and you may still need to pay additional tax to HMRC or claim a refund.

Allowable Expenses

You can reduce your taxable profit by claiming legitimate business expenses such as:

  • Tools and equipment
  • Materials
  • Travel costs
  • Insurance
  • Office and administrative costs

Record Keeping

Accurate records are essential. You should keep details of:

  • Dates of purchases
  • Descriptions of expenses
  • Amounts paid
  • The job or client the expense relates to

A simple spreadsheet can be an effective way to stay organised.

Common Expense Categories

Office, Property & Equipment

You may claim:

  • Stationery
  • Rent and business rates
  • Utilities (where applicable)
  • Insurance
  • Short-life equipment (typically used under two years)

For larger items (e.g. machinery or IT equipment), capital allowances may apply instead of full expense claims.

Personal use of phones, home offices, or equipment must be proportionally adjusted.

Stationery & Administration Costs

Allowable claims include:

  • Phone and internet bills (business portion only if mixed use)
  • Postage
  • Printing and ink
  • Software and subscriptions

Premises Costs

You can claim:

  • Rent for business premises
  • Business rates
  • Utility bills
  • Property insurance
  • Security costs
  • Use of home as an office (where applicable)

You cannot claim for purchasing premises, only running and maintenance costs.

Vehicle & Travel Expenses

You can claim business-related travel costs such as:

  • Vehicle insurance
  • Repairs and servicing
  • Fuel
  • Road tax
  • Breakdown cover
  • Parking
  • Public transport (train, bus, taxi, flights)
  • Hotels and meals during overnight business trips
  • Finance interest on vehicle purchases (where applicable)

You cannot claim:

  • Personal travel
  • Commuting to a regular workplace
  • Fines (parking or speeding penalties)

Important Reminder

Keep all receipts and records for any claimed expenses. HMRC requires supporting evidence, either as original documents or scanned copies.

 

Self Assessment Support

L M Warner Services, offer standalone Self Assessment service. We will provide guidance tailored to your situation and transparent pricing before you proceed.

For more information, contact us via email at bookkeeping@lmwarnerservices.com or by our enquiry form by pushing the button below.