Van, Tools and Materials: What Tradespeople Can Claim Against Tax (2026/27)

For most UK tradespeople, the difference between a well-prepared tax return and a poorly-prepared one is several thousand pounds a year of legitimate tax saved. The expense rules aren't complicated, but they are detailed — and most trades doing their own returns leave money on the table by missing categories, misclassifying purchases, or claiming the wrong amount on the van.

This guide covers the major expense categories for self-employed tradespeople in 2026/27: van, tools, materials, mileage, certifications, insurance, and the bits that often get missed. It applies primarily to sole traders filing Self Assessment; limited-company directors should read the equivalent through-the-company lens, where most of these costs are still deductible but go through the company books.

The principle: "wholly and exclusively"

HMRC's core rule for self-employed expenses is that costs must be wholly and exclusively incurred for business purposes. That's stricter than it sounds. If an expense has any meaningful personal element, only the business proportion is deductible — not the whole amount with a private-use adjustment as an afterthought.

In practice for trades, the principle means: things that are obviously for the job (tools, materials, PPE, public liability) are 100% deductible. Things with mixed use (the van you also drive at weekends, the phone you also use personally, the home you also live in) need a fair business-use split. HMRC expects honesty here, not creative arithmetic.

The van — usually your single biggest deduction

How you claim against the van depends on how you bought it.

Bought outright (cash or loan)

If you bought the van outright in the tax year, you can claim capital allowances on the purchase price. Most trade vans qualify for the Annual Investment Allowance (AIA) — 100% relief in the year of purchase, up to the £1,000,000 AIA cap (which no jobbing tradesperson will ever hit).

Worked example: you buy a Ford Transit Custom for £28,000 in May 2026, used 90% for business. AIA claim: £28,000 × 90% = £25,200 deduction in 2026/27. If you're a basic-rate taxpayer, that's roughly £5,040 of income tax saved in year one (plus Class 4 NIC saving on top). A higher-rate taxpayer saves around £10,080.

What counts as a van for tax purposes? HMRC follows the VAT definition: a vehicle of less than 3.5 tonnes with a "primarily goods" function. Standard panel vans (Transit, Vivaro, Sprinter, Trafic, Berlingo, Caddy, Hilux van variant) all qualify. Crew vans with a second row of seats can be borderline. Dual-cab pickups (Ranger, Hilux double cab, L200) qualify as vans only if they have at least a 1-tonne payload — otherwise HMRC treats them as cars, which changes the capital allowances dramatically.

On hire purchase (HP)

Under HP, you still claim capital allowances on the full cash price in the year you take delivery, even though you haven't paid it all yet. The finance interest is separately deductible as a running cost over the term of the HP agreement.

On contract hire / business lease

You don't claim capital allowances because you don't own the asset. Instead you deduct the monthly lease payments as a business expense. Simpler but no asset on your balance sheet. For vans with private-use element, restrict the lease deduction by the private-use percentage.

Running costs (whichever way you got the van)

All of these are deductible in proportion to business use:

• Fuel
• Insurance (commercial van policy)
• MOT and servicing
• Repairs and tyres
• Road tax (VED)
• Breakdown cover (RAC, AA, etc.)
• Parking and tolls (when business-related)
• Cleaning (yes, including the valet)

For typical jobbing trades doing 80–90% business mileage, most of these costs go through nearly in full. Keep a mileage log to evidence the split — HMRC may ask if your business-use percentage is high.

Mileage method or actual costs — pick one

You can't have both. For each vehicle, you choose either the simplified mileage method or actual costs, and that choice is sticky for as long as you own the vehicle.

Simplified mileage method

Claim a flat per-mile rate: 45p for the first 10,000 business miles in the tax year, 25p thereafter. The rate is meant to cover everything — fuel, insurance, MOT, depreciation, the lot. You can't separately claim any of those running costs on top.

Simpler, but only wins for low-mileage business users with cheap vehicles. A trade doing 8,000 business miles a year claims £3,600 — not bad, but if their actual running costs plus van depreciation comes to £6,000+ the actual-costs method wins.

Actual costs method

Add up all the real costs of running the vehicle in the year (running costs as above, plus capital allowances on the purchase), then restrict by the private-use percentage. Most established trades with their own van end up better off here, because the capital allowances on the van alone often exceed the simplified mileage claim.

Travel that counts (and travel that doesn't)

For most trades, the distinction between "deductible travel" and "non-deductible commuting" hinges on whether you have a regular workplace.

Most jobbing trades don't have a regular workplace — they have a series of temporary workplaces (the jobs). Travel between your home base and each job, and between jobs in the same day, is allowable business travel. Travel between sites and the merchants is allowable. Travel home from the last job of the day is allowable.

What's not allowable: travel from home to a single regular workplace if you have one (rare for trades but happens, e.g. for trades working on a single long-running site for 18+ months). Personal trips that happen to pass a job site. The school run.

Tools, plant and equipment

All deductible. The relevant categories:

Hand tools, power tools, ladders, work clothing storage, generators, drain cameras, MFTs (multi-function testers), compressors, scaffolding, hop-ups, dust extraction, work benches — if it's used for the work, it's claimable.

The technical rule: items expected to last more than two years are capital items requiring capital allowances. The AIA covers up to £1m of qualifying spend in the year at 100% relief, so in practice virtually all trade tool spending is fully relieved in the year of purchase.

Replacement tools consumed or lost — tools genuinely used up on a job, or stolen from the van — can be expensed as a revenue cost rather than capitalised, which is the same in tax effect but simpler administratively. Keep evidence (police report for theft, photos of damaged tools).

For VAT-registered trades, input VAT on tools is fully reclaimable. Keep the receipts — HMRC's audit pattern on trades is to ask for supplier invoices for big-ticket items like SDS drills, multi-tools, and test equipment.

Materials

Materials used on jobs are deductible when the job is invoiced. The mechanics depend on how you bill them:

• Recharged at cost — materials go through your expenses, then come back as part of the invoice; tax effect is neutral on the materials themselves
• Recharged with a mark-up — same as above, but the mark-up is taxable profit
• Customer buys materials direct — doesn't go through your books at all (and reduces CIS deduction base, which matters)

Stock at year-end: materials you've bought but not yet used at 5 April should go on your balance sheet as inventory rather than be deducted in the year of purchase. This is the single most common technical error in self-prepared trade returns — everything bought during the year gets expensed, regardless of whether it was actually used. We adjust this at year-end so your figures stand up to HMRC scrutiny.

PPE, certifications and trade insurance

All allowable. Specifically:

• PPE: helmets, safety boots, hi-vis, gloves, respiratory protection, harnesses, eye protection
• Branded workwear: yes, if it's specifically branded or distinctively trade-related (high-vis fleeces, branded polo shirts). General clothing isn't allowable even if you only wear it for work — HMRC's "wholly and exclusively" applied to everyday clothing fails because the clothing could in principle be worn off-site too
• Trade card fees: ECS (electricians), CSCS (general construction), Gas Safe registration (plumbers/heating engineers), Part P (electricians for domestic work), NICEIC enrolment, CPS scheme fees
• CPD courses and certifications: course fees, exam fees, refresher courses for existing qualifications all allowable. Note: initial training to qualify in a new trade isn't allowable — only CPD/maintenance of existing qualification is
• Public liability insurance: deductible in full
• Employer's liability insurance: deductible if you have employees
• Tool insurance: deductible
• Professional indemnity insurance: deductible (less common for trades, but some structural/specialist work needs it)

This is the category most often missed by self-preparing trades. Card fees alone can run £200–£500 a year and they always get forgotten.

Home office and admin space

Almost every trade does some work from home — quoting jobs, ordering materials, invoicing, scheduling. That gives you the right to claim home-office costs. Two methods:

Simplified flat rate

A flat monthly amount based on hours worked at home: £10/mo for 25-50 hours, £18/mo for 51-100 hours, £26/mo for 101+ hours. Simple, no calculations, no evidence required. Worth claiming if you do any meaningful business work from home — which almost every trade does.

Actual proportion of bills

Calculate the business proportion of your home utilities (gas, electric, council tax, water, broadband, insurance) by floor area used for business and time used for business. More work to calculate but typically wins over the flat rate for trades who genuinely dedicate a room to admin/office use.

Phone and broadband

The business proportion is allowable — often 50–80% for a trade who does quoting, scheduling, ordering and customer comms from a single mobile. Get a separate business mobile and the business call costs go through in full.

Subsistence and food

The honest position: food and drink during your normal working day are not allowable for sole traders. HMRC's view is that everyone has to eat — you'd need to eat whether you were working or not. Buying a sandwich at the merchants on the way to a job isn't deductible.

The limited exception: where you're working away from your normal area with an overnight stay, reasonable subsistence is allowable. A sparky local to Newcastle doing a 3-day job in Sheffield with hotel stays can claim the meals during the trip. The hotel itself is allowable. The fuel is allowable. The pre-flight pint at the airport ahead of an international job, less so.

Limited companies have slightly more flexibility because employees (including director-employees) can have subsistence reimbursed under different rules — but the test is essentially the same: is this travel that takes you outside your normal commuting area?

Marketing, vehicles signage, advertising

All deductible:

• Vehicle livery and sign-writing — full one-off cost in year of application
• Website costs: domain, hosting, builder subscription
• Online advertising: Google Ads, Facebook Ads, Checkatrade or MyBuilder subscriptions
• Local advertising: business cards, flyers, van decals, sponsor of local sports team if you get advertising in return
• Lead-generation platforms: Bark, RatedPeople, monthly subscriptions and per-lead fees

Banking, professional fees, finance costs

• Business bank account fees: deductible
• Accountancy fees: deductible — including our fees, naturally
• Legal fees: deductible if related to the trade (drafting contracts, debt collection). Not deductible for fines/penalties or non-trade matters
• Loan interest on business borrowing: deductible. Loan interest on personal borrowing for business use (e.g. personal loan used to buy van): the business proportion is allowable
• HP interest on the van: deductible over the term of the agreement
• Credit card interest on business spending: deductible. On a card mixing business and personal, only the business proportion

Subcontractor labour and CIS

If you take on subcontractors, their labour cost is deductible — that's a fundamental business expense. The CIS deductions you make from their payments and pay over to HMRC don't reduce your deductible expense (you deducted the labour gross; the CIS deduction is a flow of money through your account on HMRC's behalf, not a cost to you).

If you're the subcontractor having CIS deducted from your payments, those deductions are a payment on account against your year-end tax bill, not a separate cost. See our full CIS guide for the mechanics.

What's missed most often (and what it costs)

Common gaps we look for when reviewing trades' existing tax returns:

• Capital allowances on the van not claimed in year of purchase — either because the trade was on mileage method, or because the AIA wasn't applied. Worth thousands
• Trade card fees: ECS, CSCS, Gas Safe registration — never invoiced through the business so never claimed
• Home office: the simplified flat rate (£120–£312/year) is rarely claimed despite every trade doing quoting from home
• Insurance: tool insurance, public liability, breakdown cover — bought personally and forgotten about
• Year-end stock: materials bought but not used at year-end either claimed in full (overstating expenses) or not adjusted at all
• Replacement tools: stolen tools, broken tools, lost tools — just absorbed personally and not claimed
• Bank charges on business account: small but adds up
• Mobile and broadband proportion: typically claimed at 20% when reality is 60–70%
• Professional subscriptions on HMRC's approved list (Federation of Master Builders, NAPIT for electricians, CIPHE for plumbers): deductible but often paid personally and never reclaimed

Across these categories, a typical sole-trader trade we take over from a non-specialist accountant ends up £1,500–£4,000 a year better off in legitimate tax saved. The numbers above assume you're a basic-rate taxpayer; higher-rate the savings roughly double.

How to evidence everything

HMRC can ask to see proof of any claim within 5 years of the 31 January filing deadline. Practical record-keeping for trades:

• Digital receipt capture: Dext, Hubdoc, or the built-in receipt scanning in FreeAgent / Xero / QuickBooks. Photograph receipts on your phone the day you get them
• Bank feed: connect your business bank account to your accounting software for automatic transaction import
• Mileage log: digital is fine. The MileIQ app, Driversnote, or the mileage tracker inside FreeAgent all work
• Big-ticket invoices: supplier invoices for >£500 spending kept long-term (PDF in cloud storage is fine)
• Year-end stock count: a list with date, item, quantity, cost. Even a phone photo of the contents of your van/lockup on 5 April with a note of values is acceptable

Once MTD ITSA lands (£50k threshold from April 2026, £30k from April 2027, £20k from April 2028), digital record-keeping isn't a choice — it's the law. Get the workflow in place now.

How Fernside handles trades

Whichever tier you're on, we set you up with MTD-ready accounting software, configure the CIS handling, run the bank feed and receipt-capture app from day one, and do the year-end stock adjustment so your figures stand up. Every set of accounts and every tax return is reviewed by a Chartered Certified Accountant (FCCA) and Chartered Tax Adviser (CTA) before submission — chartered-level oversight that catches the missed deductions.

Book a free 20-minute call if you want a second look at what you're claiming. Or read our full trades hub for the CIS, VAT and MTD ITSA detail.