Many construction workers are self-employed contractors, which means they are required to file tax returns and self-assessment forms. Before you complete such a form, bear in mind that you may be entitled to a number of expenses. There are deductions allowable for a variety of necessary expenses incurred during the course of work, some of which are listed below.
Using your own car or van for work inevitably incurs costs and expenses. With a little knowledge, you can claim tax back on various expenses. Mileage is the obvious place to start, and the amount you can claim depends on the number of business miles you have travelled and the type of vehicle you drive.
Keep a logbook that notes your daily miles travelled (include odometer readings), and hang on to all fuel receipts. A logbook can also be used to distinguish between personal and business mileage.
The general rule is that you are entitled to tax relief equivalent to a portion of your salary that equates to 45p per mile up to 10,000 miles and 25p per mile thereafter. Lower rates are payable on motorcycles, though as the majority of construction workers will use a van or car, they are not discussed here.
Additional travel expenses that can be claimed, assuming proper records have been kept, include parking and tolls.
Mileage may not be claimed for travel from your home to a ‘normal’ place of work, though you may claim if you work from various different locations.
In certain circumstances, overnight expenses can be claimed to cover accommodation, subsistence, etc., provided that you have not already been reimbursed by an employer.
Many construction workers are members of professional bodies or have subscriptions to trade journals. Both may be permissible for tax relief.
You might be able to claim tax relief on clothing that is used only for work. This does not mean a pair of paint-covered jeans that you wouldn’t normally wear outside work. Rather, it covers things like a hard hat or high-visibility jacket.
Other ‘consumables’ follow similar rules. For absolute clarification, speak to a tax expert.
John pays £200 per year to be a member of his local trade association and £300 for a golf club membership. He may claim for the trade association, but not for the golf club, even though he does a lot of business on the course, and it is a higher fee.
John uses a privately-owned van for work. Last year, he drove business 20,000 miles. Provided he has kept the right records, he may elect to apply for tax relief on £7,000 of his income (4500 (10,000 x 45p) + 2500 (10,000 x 25p) = £7,000).
Use our free calculator to find out how much income tax you could be entitled to reclaim.Calculate Tax Rebate