Running your own trade business means juggling a lot: quoting jobs, managing customers, and keeping everything on track – often with little time left to think about tax. But understanding the tax reliefs available to you as a tradesperson in the UK can make a real difference to your bottom line.
In this blog, we’ll walk you through the key tax reliefs and allowable expenses that can reduce your tax bill – without the jargon. Whether you’re a builder, electrician, plumber, or decorator, you’ll find practical guidance to help you keep more of what you earn. And if you’re not sure where to start, don’t worry. At AK Tax, we’re here to guide you every step of the way.
What Can Tradespeople Claim as Expenses?
Let’s start with the basics. If you’re self-employed or run a small limited company, you’re entitled to deduct certain business expenses from your income before calculating your tax. These are known as “allowable expenses,” and they’re costs you incur solely for the purpose of running your business.
Think about the tools you rely on every day, from drills and ladders to specialist gear. These are usually claimable. The same goes for uniforms and protective clothing, especially if they’re branded or required for health and safety. Even your vehicle – if it’s used for work – can be factored in. That includes not just fuel, but also insurance, servicing, and repairs.
One area tradespeople often overlook is training. If you’re taking courses to maintain or improve the skills you already use in your trade, you can often claim those costs too. Similarly, mobile phones, business insurance, and even parts of your home running costs – if you manage admin from home – may all be partly deductible.
Capital Allowances: Going Beyond Everyday Expenses
Some purchases, especially those that last several years, are treated differently. These fall under “capital allowances,” a form of tax relief for assets like vans, machinery, or expensive tools. Rather than claiming them as a regular expense, you’ll deduct their cost over time.
The good news is that the Annual Investment Allowance (AIA) lets you claim the full cost of most items (up to a certain limit) in the year you buy them. It’s particularly useful for tradespeople investing in new equipment or vehicles.
Working out what qualifies can be tricky, though. For instance, laptops used partly for personal reasons may only qualify in part. This is where professional advice can make a real difference. At AK Tax, we help clients identify every eligible asset, ensuring they claim the relief they’re entitled to without falling foul of HMRC’s rules.
Travel, Vehicles and the Right Way to Claim
If you use your van or car for work, you’ll need to decide how to claim it. You’ve got two options. The first is to use simplified mileage rates, a straightforward method where you record your business miles and claim a set rate per mile. The second is to claim the actual costs of running the vehicle, like fuel, tax, insurance, and repairs – but this method means keeping detailed records and calculating the business use percentage.
Which route is best depends on your situation, but whichever you choose, consistency and good record-keeping are key. We often see tradespeople missing out because they’ve not kept accurate mileage logs or misunderstood the rules around private use.
Don’t Forget Training and Insurance
Your development matters – not just for your business, but for your tax return too. Courses that maintain your existing trade knowledge are usually allowable. So, if you’re brushing up on electrical safety or attending a workshop on new plumbing regulations, you can likely claim those costs.
Business insurance is another area where relief is often available. Most tradespeople carry some form of cover, whether it’s public liability, tool insurance, or legal expenses cover. These aren’t just smart business decisions – they’re also tax-deductible, helping to keep your overheads manageable.
Why Record-Keeping is Your Best Friend
Good records don’t just keep HMRC happy – they help you claim everything you’re entitled to. That means keeping receipts for tools and materials, logging your mileage, and maintaining a record of any big asset purchases. Using accounting software or cloud-based tools can make this much easier, especially with the move towards Making Tax Digital.
At AK Tax, we support clients with tailored systems that simplify the process. We’ll help you stay organised, reduce the risk of errors, and make tax time far less stressful.
How AK Tax Can Help
Navigating tax as a tradesperson isn’t always straightforward, especially when your priority is getting the job done. That’s where we come in. At AK Tax, we work closely with tradespeople across Medway and Kent – plumbers, electricians, decorators, and more – to make sure they’re claiming every penny they’re entitled to.
We don’t just file your returns. We look at your full financial picture, advising on capital allowances, vehicle claims, and the most tax-efficient way to structure your expenses. We also help set up easy-to-use bookkeeping systems, so you’re always in control of your finances.
It’s not just about saving tax. It’s about giving you peace of mind, so you can focus on the work you do best.
Ready to Make Tax Work for You?
If you’re unsure whether you’re claiming everything you could be, or just want to take the hassle out of tax altogether, we’re here to help.
Get in touch with AK Tax today for a no-obligation chat. Let’s see how we can help you reduce your tax bill – and keep more of your hard-earned income in your pocket.
