Builders and labourers are often brilliant at managing jobs, customers and deadlines. Tax tends to be a different story. The construction industry has its own rules, its own deductions and its own frustrations — and every year many workers end up paying more tax than necessary simply because they do not realise what can be claimed.
Understand CIS Properly
If you work under the Construction Industry Scheme (CIS), tax is often deducted before you even receive payment. Many subcontractors see 20% deductions, CIS statements and varying payment amounts without ever fully understanding how it all fits together.
The key thing to remember is that CIS deductions are usually advance payments towards your eventual tax bill. They are not necessarily the final amount of tax you owe — which is exactly why so many subcontractors are owed a refund.
Keep Every CIS Statement
This sounds obvious, yet every year subcontractors struggle because their statements have been lost, deleted, misplaced or simply forgotten. These records are crucial when working out how much tax has already been paid on your behalf. Without them, claiming the correct refund becomes much harder than it needs to be.
Don’t Forget Tools
One of the biggest missed expense categories in construction is tools. Examples include:
- power tools
- hand tools
- safety equipment
- replacement equipment
- consumables
Many workers remember the large purchases but forget the smaller ones that quietly accumulate throughout the year. Add them all up and the unclaimed total can be significant.
Travel Is Often Underclaimed
Construction workers frequently travel between sites, suppliers and temporary workplaces, yet mileage is regularly underclaimed. The difference between legitimate business travel and ordinary commuting can have a real impact on a tax calculation, so it is worth understanding which journeys count.
The Van Is Full of Receipts
Almost every accountant who works with construction clients has heard some version of: “I think the receipt is somewhere in the van.”
The problem usually is not obtaining receipts — it is keeping them organised. A £20 receipt forgotten today becomes an unclaimed expense later. Repeat that dozens of times across a year and the tax impact adds up fast.
Making Tax Digital Is Coming
Many builders and labourers still manage records through notebooks, paper folders, envelopes and WhatsApp messages. The move towards Making Tax Digital means record-keeping is becoming increasingly important. The sooner records become organised, the easier future compliance becomes.
The Bottom Line
Builders and labourers face unique tax challenges because of CIS deductions, travel patterns and tool purchases. The workers who generally achieve the best outcomes are not necessarily the ones earning the most — they are the ones who keep CIS statements, record expenses, track mileage and organise receipts.
Small habits throughout the year almost always make a bigger difference than any clever tax-saving trick discovered in January. 123Tax is built to keep CIS records, receipts and mileage in one place as you work, so the money you are owed comes back to you rather than slipping through the cracks.