This is general guidance, not personalised tax advice. Thresholds and rules change — check gov.uk or your accountant for your specific circumstances.
Every January, the same story plays out across the trade: a folder of crumpled receipts gets dumped on an accountant's desk, half of them faded past reading, with a week to go before the Self Assessment deadline. It doesn't have to be like that — and the fix isn't more admin, it's the same admin done once, at the point of spending, instead of reconstructed months later.
Why job costing and Self Assessment are the same job
Self Assessment needs accurate income and allowable expense figures for the tax year. Job costing needs the same figures, broken down by job, tracked as they happen. If you log every job cost properly through the year, your Self Assessment return is just those numbers added up — not a separate reconstruction exercise.
What counts as an allowable business expense on site
- Materials and merchant purchases used directly on a job
- Sub-contractor and CIS labour costs
- Plant and tool hire
- Fuel and business mileage (at the HMRC approved mileage rate, if you're not claiming actual vehicle costs)
- Parking, tolls and congestion charges for business travel
- Tools and equipment, including repairs and replacements
- Protective clothing and workwear
- A reasonable proportion of phone and admin costs used for the business
The rule of thumb HMRC applies is that a cost must be "wholly and exclusively" for the business. Mixed personal and business spending needs to be split fairly and consistently.
CIS: what both sides need to track
If you're a contractor paying sub-contractors under the Construction Industry Scheme, you need records of gross payments made, tax deducted, and CIS statements issued each month. If you're a sub-contractor being paid under CIS, keeping your own record of every deduction is what determines whether you're due a refund at year end — many sub-contractors overpay through the year and only get it back by filing accurately with full records to back it up.
Making Tax Digital for Income Tax
HMRC is phasing in digital record-keeping and quarterly updates for sole traders and landlords, starting with higher-turnover businesses first and extending to smaller ones over time. If it applies to you, paper receipts and end-of-year spreadsheets stop being enough — digital, job-by-job records become the requirement, not a nice-to-have. Getting into the habit of digital receipt capture now means the transition costs you nothing when your turnover crosses the threshold.
A simple monthly routine
- Scan every receipt the day it happens — don't let them pile up in a jacket pocket.
- Tag each one to the job it belongs to, not a generic "materials" bucket.
- Once a week, glance at each open job's running total against its quote.
- Once a month, export a summary and check it against your bank statement.
- At year end, export everything for the accountant in one go — no digging required.
FAQ
What if I've already lost receipts from earlier in the year?
Bank and card statements can support a reasonable estimate for missing receipts, but it's not ideal — HMRC prefers original evidence. The fix going forward is capturing receipts digitally the moment you get them, so this doesn't happen again.
Do cash payments to a mate who helped for a day need recording?
Yes — if it's a genuine business cost, it should be recorded like any other expense, and depending on the arrangement, CIS rules may apply if they're working as a sub-contractor rather than casual labour.
How does job-level tracking help if HMRC only cares about the yearly total?
Because the yearly total is just every job's total added together. Getting it right at job level, as it happens, is far more reliable than trying to reconstruct twelve months of spending from memory in January.