Allowable expenses are the costs a CIS subcontractor can deduct from their gross income when calculating the taxable profit on which income tax and National Insurance are charged, and they are the main lever that determines whether a subcontractor is owed a refund at year-end.

Because CIS deductions are taken on gross labour income before any expenses are considered, two subcontractors on identical gross income can have very different tax positions depending on how much they spend on legitimate business costs. Missed expenses mean a higher taxable profit, which means a lower refund or a higher bill.

Common allowable expenses for CIS subcontractors include:

  • Vehicle costs. Business mileage in your own vehicle at the approved mileage rate (55p per mile for the first 10,000 business miles in 2026/27, 25p per mile thereafter). Alternatively, actual running costs (fuel, insurance, servicing, tax) apportioned to business use. Vans used wholly for work can often be claimed in full.
  • Tools, plant and equipment. Hand tools, power tools, safety equipment and similar items used on site. Larger plant may qualify for the Annual Investment Allowance (up to £1,000,000 in 2026/27) or Writing-Down Allowance.
  • Materials bought for jobs. Where you supply materials as part of your work, the cost is deductible as an expense. Note that these materials are also excluded from the CIS deduction base, so they reduce tax through both routes.
  • PPE, clothing and workwear. Safety boots, hard hats, hi-vis and other site-specific clothing. Ordinary clothing is not allowable even if you wear it at work.
  • Phone and communications. The business proportion of mobile phone costs.
  • Insurance. Public liability, professional indemnity and similar policies taken out for business purposes.
  • Use of home as office. A flat rate of £10/month (25-50 hours), £18/month (51-100 hours) or £26/month (over 100 hours) where you carry out administrative work at home, up to a maximum of £312 a year.
  • Accountancy and professional fees. The cost of having your Self Assessment return prepared and your CIS refund claimed.

For a full list and guidance on how to document each category, see our guide to expenses CIS subcontractors can claim in 2026/27.