Tax Deductions Every Tradesperson Should Claim

Tax Deductions Every Tradesperson Should Claim

An allowable expense is any cost you run up wholly and exclusively to do your work, and every pound of it you don’t claim is a pound of profit you pay tax on for no reason. For a self-employed tradesperson that covers far more than the obvious — tools, van and materials, yes, but also mileage, PPE, your work phone, training, insurance and a slice of your household bills. Claim what you’re entitled to, keep the records to back it up, and you cut your tax bill legitimately.

This is a general guide, not personal tax advice. Your circumstances change what applies, so run anything you’re unsure of past a qualified accountant.

How allowable expenses actually work

You pay Income Tax on your profit, not your turnover. Profit is what’s left after you subtract your allowable business costs from what you brought in. So every genuine business cost you record lowers the figure you’re taxed on.

The test HMRC applies is “wholly and exclusively” for the business. A cost that is purely for the work is fully allowable. A cost that is part business and part personal — your phone, your car, your home — is only allowable for the business share, so you split it fairly and keep a note of how you worked the split out.

Two things to hold in mind. First, this is about self-employed sole traders and partnerships; if you run through a limited company the rules differ and you should take specific advice. Second, you can only claim what you can evidence. No receipt, no record, no claim that will survive a query.

The costs most trades can claim

Most of a tradesperson’s spending falls into a handful of everyday buckets. None of these is exotic — the money leaves the door of most one-van businesses every week — but plenty of it goes unclaimed.

Tools and equipment

The tools of your trade are allowable. Consumables and smaller tools are usually treated as a straightforward expense in the year you buy them. Larger, longer-lasting kit — a decent power tool, test equipment, a plant item — is more likely to be claimed as capital, typically through the Annual Investment Allowance, which for most trades still means you get the relief in the year of purchase. The practical point is simple: keep every tool receipt, because it all counts one way or the other.

Repairs and servicing of your tools and equipment are allowable too, as is the cost of replacing worn kit.

Van, fuel and running costs

Your work van is one of the biggest reliefs available. You have two routes and you pick one per vehicle and stick with it.

The simplified way is mileage: you claim a flat rate per business mile that is meant to cover fuel, servicing, insurance and wear. It’s less paperwork and works well if you don’t want to track every running cost.

The alternative is to claim the actual running costs — fuel, insurance, road tax, MOT, repairs, servicing — apportioned for any private use, plus capital allowances on the van itself. This can be worth more if the van is expensive to run, but it means keeping every receipt. Either way, keep a record of your business mileage; it underpins both methods.

Materials and stock

Materials you buy for a job and bill on, or use up in the work, are allowable. This is the most obvious category and usually the best-documented because it’s on your supplier invoices anyway. Keep those invoices tied to jobs so your figures reconcile.

Protective clothing and workwear

PPE and specialist protective clothing — hi-vis, safety boots, gloves, hard hats, ear defenders — are allowable, as is branded uniform with your business name on it. Ordinary clothes you could wear anywhere are not, even if you only wear them for work. The line is protection and branding, not “clothes I put on to go to work”.

Phone, internet and admin

The business share of your mobile, and of your home internet if you use it to run the business, is allowable. So are the smaller running costs that keep the business ticking: stationery, postage, bank charges on a business account, accounting software, and the subscriptions you actually use for work.

Insurance and professional fees

Public liability insurance, tools and van insurance, and other cover you carry for the business are allowable. So are your trade body memberships and registration fees, your accountant’s fees, and the cost of the lead-generation or marketing services you use to win work.

Training that keeps you current

Training that maintains or updates the skills you already use in your trade is generally allowable — the courses and re-certifications that keep you compliant and current. Training to start an entirely new trade or qualification is treated differently and may not be allowable, so check before you claim a big course fee.

Using your home as an office

If you do your quotes, invoicing and admin from home, you can claim toward the cost. The simplest route is HMRC’s flat-rate allowance based on the hours you work from home each month, which needs no bills or calculations. Alternatively you can work out the actual proportion of your household running costs that relates to business use, which takes more effort but can be worth more.

The records MTD now expects

Claiming the right expenses is only half of it; you also have to keep records HMRC will accept, and the bar has risen. Making Tax Digital for Income Tax is now being rolled out, and it changes how self-employed people are expected to keep and submit their figures.

MTD for Income Tax became mandatory from 6 April 2026 for sole traders and landlords with qualifying income over £50,000. It extends to those with qualifying income over £30,000 from 6 April 2027, and over £20,000 from 6 April 2028. If you’re caught by it, you need to keep your records digitally and submit quarterly updates through compatible software, rather than pulling a shoebox of receipts together once a year.

Even if your income is below those thresholds today, the direction of travel is clear, and the habits are worth building now:

• Keep a separate business bank account so business and personal money never tangle.

• Photograph or scan every receipt as you get it — most bookkeeping apps let you snap and file on the spot.

• Log your business mileage as you go, not from memory at year end.

• Reconcile little and often rather than once in a panic before the deadline.

Good records don’t just satisfy HMRC. They mean you actually claim everything you’re owed, because nothing slips through the cracks, and they make a query far less stressful if one ever comes.

FAQ

Can I claim for my everyday work clothes? Only protective clothing and branded uniform. Safety boots, hi-vis, gloves and a top with your business name on it are allowable; a plain pair of jeans and a jumper you wear on site are not, even if you never wear them anywhere else.

Should I use the mileage rate or claim actual van costs? It depends on the vehicle. The flat mileage rate is simpler and often better for a cheaper, economical van. Claiming actual running costs plus capital allowances can be worth more for an expensive or thirsty van, but means keeping every receipt. Pick one method per vehicle and be consistent — your accountant can tell you which comes out ahead for you.

Do I need to keep paper receipts? You need to keep evidence, but a clear digital copy — a photo or scan — is fine and is exactly what MTD pushes you toward. The key is that it’s legible, dated and matched to the cost. Keep records for at least the period HMRC requires.

What counts as “qualifying income” for MTD? Broadly, your gross income from self-employment and property before expenses. Because it’s measured before you deduct costs, some trades are caught by the thresholds sooner than they expect — check your turnover against the £50,000, £30,000 and £20,000 lines rather than your profit.

Can I claim training courses? Training that keeps your existing skills current or renews a certification you already hold is generally allowable. Training to move into a brand-new trade or gain an entirely new qualification usually isn’t. If it’s a big fee, confirm the position before you claim.

Is it worth paying an accountant? For most trades, yes — and the fee itself is an allowable expense. A good accountant usually saves more than they cost by making sure you claim everything you’re entitled to and stay the right side of the rules, especially now MTD adds quarterly reporting to the mix.

Spend less time chasing, more time earning

The best way to make your allowable expenses worth claiming is to keep the work coming in. Trade Pilot only charges when a real local job lands in your inbox, and each lead is sold to no more than three trades in your area — so your marketing spend goes on genuine jobs, not wasted clicks. That’s a cost you can see the return on, and claim against your tax.

Related reading: a weekly bookkeeping system · Making Tax Digital for trades · CIS deduction rates · sole trader vs limited company