A complete guide to construction business expenses you can claim

If you’re running a construction business in the UK, understanding which expenses you can claim is essential to save money and stay compliant with HMRC. This guide will help you navigate the various business expenses you can claim, from materials to training costs, ensuring you get the maximum benefits. Here’s everything you need to know to optimise your business claims.

Claiming materials and supplies for your construction business

Materials and supplies are some of the most significant expenses for any construction business. Luckily, you can claim these costs to reduce your taxable income. Whether it’s bricks, cement, timber, or paint, if the materials are essential for your construction projects, they are deductible.

Make sure to keep all your receipts and invoices. HMRC requires proof that these materials were purchased solely for business use. Claiming these expenses is straightforward and can result in significant savings for your business.

Quick tip: Organise your invoices

To make the process smoother, consider organising your invoices digitally. Use an accounting software or a dedicated folder in your email to store receipts. This not only saves time during tax season but also provides easy access if HMRC requests proof.

How to claim vehicle expenses for your construction business

If you use vehicles for your construction business, such as vans or trucks, you can claim various related expenses. Fuel, insurance, maintenance, and repairs are all tax-deductible. You can also claim mileage if you use your personal vehicle for business purposes.

To maximise your claims, keep detailed records of all vehicle-related expenses. Consider using a mileage tracking app to ensure accuracy and ease when calculating mileage deductions.

What can you claim?

• Fuel costs
• Maintenance and repairs
• Vehicle insurance
• Depreciation costs

Maximising equipment and tool depreciation claims

Construction businesses rely heavily on tools and equipment, which can be expensive. However, you can claim depreciation on these assets. Depreciation represents the loss of value over time due to wear and tear. This claim allows you to recover some of the costs associated with purchasing essential equipment.

Depreciation claims can be complex, but they are worth the effort. Make sure to keep detailed records of all your assets, including purchase dates and values.

Deducting labour costs and payroll expenses

Labour is another major expense in construction, and the good news is that you can claim wages, salaries, and even overtime pay. Keep thorough records of all payroll expenses, including any bonuses paid to your team.

If you hire subcontractors, these costs are also deductible. Ensure that all payments to subcontractors are documented, and remember to complete the necessary paperwork, such as CIS (Construction Industry Scheme) returns.

Don’t forget: The CIS requirements

Stay compliant with the CIS requirements. Failing to do so can result in hefty fines, which no construction business wants to face. Make sure you understand your obligations and keep up with all CIS filings.

Claiming a home office deduction

If you run your construction business from home, even part-time, you might be eligible for a home office deduction. This claim allows you to deduct a portion of your household expenses, such as mortgage interest, rent, utilities, and internet costs.

To qualify, you must use a part of your home exclusively and regularly for business purposes. It’s a fantastic way to reduce your tax bill, especially if you handle a lot of your administrative tasks from home.

A note on eligibility

Remember that HMRC has strict rules about what constitutes a “home office.” Make sure you meet these requirements to avoid any issues during an audit.

Training and development costs

Investing in your team’s skills is crucial for success in the construction industry, and fortunately, training costs are deductible. Whether it’s a course on the latest building regulations or a seminar on new construction techniques, you can claim these expenses.

This includes not only the cost of the training itself but also any travel and accommodation costs if the training is off-site.

Boosting your team’s skills

Well-trained employees are an asset to your business. By investing in training, you’re not only reducing your tax burden but also enhancing your team’s performance and your company’s reputation.

Insurance premiums you can claim

Insurance is a must for any construction business, from public liability to professional indemnity. The good news is that you can claim most of these premiums as business expenses.

Make sure you’re adequately covered, but don’t overpay. Review your policies annually to ensure you’re getting the best deal, and remember to claim all relevant premiums.

Common insurances to claim

• Public liability insurance
• Employers’ liability insurance
• Professional indemnity insurance
• Vehicle insurance for business use

Travel and accommodation expenses

Travel is often necessary in construction, whether it’s to meet clients, visit job sites, or attend training sessions. If you or your employees travel for work, these expenses are deductible.

Accommodation costs can also be claimed, but they must be directly related to business activities. Keep all receipts and ensure that they clearly show the business purpose of the travel.

Travel smart: Maximise your claims

Use a business credit card to easily track travel expenses. This also simplifies record-keeping, making it easier to calculate your deductions.

Interest and bank fees

If you’ve taken out a loan for your construction business, you can claim the interest paid as a business expense. This also applies to any overdraft fees or charges related to business banking.

Make sure to keep all bank statements and loan documents. Accurate records ensure you get the maximum deduction possible and help if HMRC has any questions.

Optimise your finances

Consider consulting a financial advisor to ensure you’re not missing out on any potential deductions. A small investment in expert advice can pay off significantly.

Compliance and safety equipment costs

Safety should always be a priority in construction. The costs of safety equipment like helmets, gloves, and high-visibility vests are fully deductible. You can also claim for compliance costs, such as site inspections or audits.

By claiming these expenses, you not only stay compliant with regulations but also ensure the safety of your workforce without sacrificing profits.

Stay compliant, stay safe

Investing in compliance isn’t just about avoiding fines; it’s about protecting your team. Ensure that you’re claiming every possible expense to keep both your workers and your budget safe.

By understanding and claiming all the expenses available to your construction business, you can significantly reduce your taxable income and reinvest those savings into growing your company. Don’t leave money on the table – ensure you’re claiming everything you’re entitled to with this complete guide.

Ready to optimise your construction expenses? Contact us today to learn more about how we can help you maximise your claims and keep your business thriving!