What Can I Claim For If I Am A Self-Employed Builder?

If you are wondering what you can claim as allowable expenses as a self-employed builder in the UK, you will find the answer to this question in the following blog post. We will also discuss how to claim these expenses as you file your self-assessed tax returns and how to benefit from the CIS scheme as a self-employed builder.

What Can I Claim For If I Am A Self-Employed Builder?

If you are a self-employed builder, you can claim the following as allowable expenses for your self-assessed income tax returns:

• Rent
• Business rates
• Home office space (only the space that is used as an office)
• Utility bills
• Buildings insurance
• Maintenance / Repair
• Security costs
• Staff salaries including bonuses, pensions and benefits
• Stationery
• Printing costs/ink
• Postage
• Phone and internet bills
• Software used for under two years (or on subscription)
• Transport and travel costs for the purposes of your work; excluding the travel costs of coming and going back home from your workplace. 
• Legal and professional costs such as services fees of an accountant, financial adviser, solicitor, surveyor, etc
• Bank charges such as interest on bank and business loans, hire purchase interest or leasing payments
• Raw materials/stock
• Tools and equipment
• Marketing costs such as advertisements, flyers, website, etc 
• Professional insurance (if applicable)
• Special clothing, uniform, protective clothing or specified gear
• Membership costs of trade bodies or professional organisations
• Training costs such as a refresher course that can increase your knowledge and skill for the business

However, if you use your £1,000 trading allowance, you cannot claim allowable expenses.

How Do I Claim Expenses If I Am A Self-Employed Builder?

You can claim your allowable expenses as a builder when you file your self-assessed tax returns; whether it is online or by taking a printout of the forms and submitting a printed copy to the HMRC.

You should start with first maintaining bills and receipts of all your expenses in physical form (you can also save a digital copy on a computer). These should ideally be categorised according to their purpose and kept in a file.

To avoid having to calculate all your expenses at the end of the tax term, you can calculate your monthly expenses and maintain records month-wise. This can be done using a simple calculator or a spreadsheet on a computer.

In this way, when you file your self-assessed income tax returns, you can simply enter your income for the year, deduct the total allowable expenses and use the remaining amount of taxable income to apply an income tax rate.

Am I Eligible For The Construction Industry Scheme  If I Am A Self-Employed Builder?

Yes, you are eligible for the Construction Industry Scheme if you are a self-employed builder. The CIS scheme is a tax-collection tool used by the HMRC to facilitate sub-contractors in the construction industry and discourage the practice of cash-in-hand payments.

If you are a builder who works as a sub-contractor, you can register for the CIS scheme. One of the biggest benefits of this scheme is that when a contractor pays you, they will deduct 20% deduct versus the 30% tax deduction for non-registered builders.

In this way, CIS-registered builders can claim a tax rebate of up to £2,000 from the HMRC at the end of a tax term.

If you do not want deductions from payments received from contractors, you will need to register for a “gross payment status”. In this case, you will need to deduct taxes when you file your self-assessment tax return.

If you want to register for CIS, you can simply use your Government Gateway user ID and password to register online.

Conclusion:

The above discussion clearly outlines the various operating costs that can be categorised under allowable expenses if you are a self-employed builder. You will need to deduct these expenses from your operating income to arrive at a resulting taxable income; to which a tax rate can be applied.

References:

Expenses if you’re self-employed: Overview – GOV.UK

Self-employed expenses: which allowable expenses can I claim? (with a list!)

What is a self-employed builder? – TaxScouts

What can I claim as self-employed expenses on my tax return?