CIS Subcontractors: What We Need from You To File Your Self-Assessment
If you’re a subcontractor in the Construction Industry Scheme (CIS), it can feel like tax is already being dealt with because deductions come off your payments each month. The good news is that CIS deductions are treated as advance payments towards your tax and National Insurance, and your Self-Assessment return is where everything gets reconciled properly.
This blog explains (in plain English) what information we need from you, what counts as proof of income, and the types of expenses and capital allowances you may be able to claim. The aim is to make this easy and stress-free.
Quick reminder: CIS and Self-Assessment are linked (but not the same thing)
Under CIS, contractors deduct money from your payments and pass it to HMRC, and those deductions count as advance payments towards your tax and National Insurance bill.
Even though deductions happen monthly, you still report your self-employed income and expenses on the Self-Assessment return and then credit the CIS tax already deducted.
CIS income is reported in the self-employment section of the tax return (not the employment section).
The big picture: what we’re doing for you
To file your return correctly, we need enough detail to work out your taxable profit (income minus allowable costs) and then set your CIS deductions against the final tax calculation. Allowable expenses reduce your taxable profit, as long as they’re legitimate business costs.
1) Proof of income: what you should send us
For CIS subcontractors, the key point is that your income for tax is your gross sales (what you invoiced/earned), not just what hit your bank after CIS deductions. Your paperwork helps us evidence the totals and ensure your CIS tax credit is correct.
CIS-specific income proof (most important)
CIS payment and deduction statements from each contractor (monthly). Contractors must give you a written statement each time they make a CIS deduction, within 14 days of the end of each tax month.
A summary of your CIS income and CIS tax deducted for the tax year (if you have one from your contractor or software), backed up by the monthly statements.
Other income proof we’ll usually need (to complete the return)
Copies of your invoices issued (or a simple sales list), especially if you work for multiple contractors or do non-CIS jobs too.
Bank statements for the period (business account ideally, or the account where your work income is paid) so we can reconcile income and spot any missing months.
If you had any employment income as well (very common)
Please send us:
Your P45 if you left a job during the tax year (it shows pay and tax to your leaving date).
Your P60 if you were employed at the end of the tax year (it’s the end-of-year certificate showing pay and tax for that employment).
Your final payslip(s) if there was a job change or any unusual payroll adjustments, so the figures match what HMRC holds.
2) Expenses you can usually deduct (and what we need as evidence)
HMRC’s starting rule is straightforward: you can claim costs of running your business as allowable expenses as long as they’re related to the business. If something is partly personal, you can only claim the business proportion.
Below are the main categories HMRC lists for self-employed allowable expenses, with examples that are common for trades and CIS subcontractors.
Common allowable expense categories (with trade-friendly examples)
1) Office, property and equipment (day-to-day running costs)
· Office costs such as stationery, admin supplies, and business phone bills (business proportion if mixed use).
· Business premises costs if applicable (for example, rent, heating, lighting, and business rates for a workspace).
2) Car, van and travel: Travel costs such as fuel, parking, train or bus fares for business journeys.
3) Clothing: Clothing costs only where they meet HMRC’s categories (for example, uniforms or protective clothing).
4) Staff and subcontractor costs: Staff costs such as wages, or payments to subcontractors you hire to help you complete jobs.
5) Materials and goods: Things you buy to sell on or use in the job, such as stock or raw materials.
6) Financial costs: Insurance, bank charges and similar financial costs connected to the business.
7) Professional and legal costs: Business-related legal, accounting and financial costs.
8) Marketing and subscriptions: Advertising or marketing costs, including website costs.
9) Training: Training courses related to your business (for example, refresher courses or CPD).
What “good evidence” looks like
To support expense claims, HMRC expects you to keep records of your business income and expenses.
Examples of useful evidence include:
Supplier invoices and receipts showing what you bought, the date, and the amount.
Bank/card statements that match the receipts.
If something is mixed business/personal (like a mobile phone), a simple note showing the business proportion you’ve claimed. HMRC’s example shows you only claim the business element.
3) Capital allowances (for tools, equipment, vans etc.)
Some items aren’t treated as day-to-day expenses because they’re business assets you use over time. HMRC allows relief for certain assets through capital allowances (depending on your accounting method).
The simplest headline: Annual Investment Allowance (AIA)
AIA lets you deduct the full value of most plant and machinery from your profits (up to the AIA limit) in the year you buy it.
The AIA amount is £1 million.
You generally can claim AIA on most plant and machinery, but not on business cars.
What often counts as “plant and machinery” in real life for trades
HMRC’s capital allowances guidance refers broadly to plant and machinery, which commonly includes equipment and machinery and certain business vehicles (with special rules for cars).
So in practice, this can often include items like:
Tools and equipment you buy and keep for the business (for example, larger or longer-life kit).
Machinery or specialist equipment.
Business vehicles, with different rules for cars versus vans/lorries.
Cash basis vs traditional accounting : From the 2024 to 2025 tax year, cash basis is the default method of accounting for most self-employed people, unless you opt out or cannot use it.
Because the right treatment depends on what you bought and your accounting method, the best thing you can do is send us:
Purchase invoices/receipts for any bigger items (tools, equipment, vans, computers etc.).
A note of when you started using the item for work and whether there’s any personal use. You can only claim the business element where there is mixed use.
4) One easy checklist: what to send us
Here’s the simplest way to keep things smooth. If you can send us the following, we can do the rest.
Income and CIS
All CIS payment and deduction statements for the tax year (all contractors).
Your invoices issued or a sales list, especially if you had non-CIS work too.
Bank statements covering the tax year (or your accounting export).
Employment (if applicable)
P45 for any job you left during the year.
P60 for any job you had at year-end.
Expenses
A folder of receipts/invoices (photos are fine if they’re clear) for your business costs.
Mileage/travel records if you’re claiming travel costs.
Phone/internet breakdown if there’s personal use (business proportion only).
Capital items
Receipts/invoices for tools, equipment, machinery, and vehicles bought for work.
5) Record-keeping: how long to keep everything
This isn’t about catching you out, it’s just good practice and it protects you.
HMRC requires self-employed people to keep records of business income and expenses for their Self Assessment tax return.
You must keep those records for at least 5 years after the 31 January submission deadline for the relevant tax year.
6) A quick note about the £1,000 trading allowance
Some people hear about the £1,000 trading allowance and assume it’s always best. It isn’t always, especially in trades where expenses can be significant.
If you claim the trading income allowance, you cannot deduct allowable expenses or claim other allowances (including capital allowances).
We’ll always look at what gives you the most sensible and compliant result.
If you have any questions, don’t hesitate to contact us.