The deduction takes no account of what it cost you to do the work. Your costs go in the tax return, they reduce the profit you are taxed on, and that is what produces the repayment. Here is what counts and what HMRC will not accept.
The rule underneath all of it
A cost is allowable if it was incurred wholly and exclusively for the purposes of the trade. Where something is used both privately and for work — a phone, a van, a room at home — you claim the business proportion and you need a reasonable basis for how you arrived at it.
Travel and subsistence are the point where CIS confuses people. They are allowable costs in your tax return, so they reduce the tax you pay. They are not deducted from the payment the CIS deduction is charged on — a mileage line on your invoice has the full 20% taken off it. Both statements are true at once, and they operate in different places.
Refund firms usually charge a percentage of what they recover, and some take a deed of assignment so HMRC pays them and they pass on the balance. That is legal, but it means the refund is not paid to you and the arrangement can cover future years as well. Read what you are signing, check whether the fee is a percentage or a fixed amount, and check whether it covers the tax return itself or only the claim. HMRC publishes guidance on this at gov.uk.
Yes. Hand tools and consumables are an ordinary running cost of the trade. More expensive items — a mitre saw, a welder, a compressor — are usually claimed through capital allowances instead, which normally gives full relief in the year you buy them under the Annual Investment Allowance. Either way the cost reduces the profit you are taxed on, and you need the receipt.
Yes. You can either claim the actual running costs of the van and adjust for private use, or use the flat mileage rate. From 6 April 2026 the flat rate is 55p a mile for the first 10,000 business miles in the year and 25p a mile above that. Whichever you choose, you need a record of the business journeys — dates, destinations and mileage. You cannot swap between the two methods for the same vehicle part-way through.
Usually not. Food you buy while working in your normal area is a personal cost, on the basis that you would have had to eat anyway. Subsistence becomes allowable where you are on a genuine business journey outside your normal pattern of work — staying away overnight, or travelling to a site well outside your usual patch. Keep the receipts and the reason.
Yes. Protective clothing and equipment needed for the job are allowable, as is workwear carrying your business name. Ordinary clothes are not, even if you only ever wear them on site, and even if they wear out because of the work.
You can claim a cost you actually incurred, but you must be able to show it. Bank and card statements will support the fact and the amount of a payment, though they do not show what was bought. Suppliers will often reissue a receipt or provide an account statement. Do not estimate a round figure, because that is what gets a claim challenged.
Send us a year of statements and a rough list of what you spend. We will tell you what is allowable, what needs evidence you may not have, and what it is worth.