SimpleReturns

Company tax returns for tradespeople

Reviewed by Lee Jones, Founder · Updated 16 July 2026
The short answer

If you are a plumber, electrician, gas engineer or decorator trading through your own limited company, the filing duty is the same as for every company in the country: a Company Tax Return to HMRC within 12 months of your company's year end, plus a set of accounts, even in a year you made a loss. What makes yours different is what goes into it: the van, the tools, the materials you bill on to customers, the safety kit and the cards and certificates you renew to stay on the job. There is one trap to check before anything else: if any of your work is construction subcontracting, tax may already have been taken off your invoices before the money reached your bank.

Official source. This guide is a plain-English summary of official GOV.UK guidance, not advice. The authoritative source is Company Tax Returns on gov.uk. Always rely on that over our summary.

What counts as your company's income?

Everything the company was paid for doing the work. For a trade company that usually means:

  • Day rates and priced jobs, whether the customer is a homeowner, a landlord, a builder or another firm.
  • Callout and emergency fees, including the premium for the Sunday night boiler rescue.
  • Materials you bill on. If you buy £600 of copper and fittings and charge the customer £600 for them, that £600 coming in is income and the £600 going out is an expense. Record both. Do not quietly cancel them against each other, because your return needs the true totals of each.
  • Small retainers or maintenance contracts, like a landlord paying you monthly to cover their properties.

Your tax bill is then worked out on the profit, which HMRC calculates its own way rather than simply copying the accounts figure. Small companies pay 19% on profits up to £50,000; bigger profits move towards 25%.

One side note while we are talking about money in: if the company's takings go over £90,000 across any rolling 12-month period (not just your accounting year), it has to register for VAT. That is a separate job from the tax return, but tradespeople hit that line sooner than they expect because materials billed on count towards it.

What can your company claim?

The rule behind every expense is simple: the cost must be purely for the business. If a cost is part business and part personal, only a clearly separate business part can be claimed. For a trade company the usual list looks like this:

  • The van. A van bought for the business normally qualifies for a full deduction against profits in the year you buy it, under an allowance that covers vans but not cars. When the company owns the van, its fuel, insurance, repairs and the roof rack are company running costs. If the van is used only for the work, with no more than the odd insignificant private trip, there is no extra personal tax. But if you also use it privately in a real way, that private use can trigger a benefit-in-kind tax charge, so talk to an accountant before you rely on it.
  • Tools and equipment. Power tools, test meters, ladders, pipe benders, the lot. Bigger kit is treated like the van: claim the value in the year you bought it.
  • Materials. Everything you buy to do the job, whether you bill it on at cost or with a markup.
  • Safety kit and workwear, with one honest caveat. Hard hats, steel toecaps, hi-vis, gloves, goggles and branded uniform are claimable because they are protective kit or uniform. Ordinary clothes are not, even if you only ever wear them for work. The jeans you crawl under floors in are still everyday clothing in HMRC's eyes, so they do not count.
  • Certificates, registrations and renewals. The registrations and cards your company must hold to be allowed to do the work, like gas-safety registration or an electrical scheme membership, are costs of trading and claimable.
  • Phone and software. A phone used for the business, and the job-management or invoicing app on it. If the company takes out the phone contract in its own name and gives you one phone, the whole cost is a company cost with no extra personal tax, even when you also use it personally. A contract in your own personal name is different and cannot be split that way.
  • Insurance. Public liability, tool cover, van insurance.

Keep the receipts. The claim is only as good as the paper behind it.

The trap in this trade: CIS deductions you did not ask for

If any of your work is subcontracting for a builder or another contractor, the Construction Industry Scheme may apply: the contractor takes money off your payments, usually 20%, or 30% if you are not registered, and passes it to HMRC as an advance payment towards your tax.

That changes your year in two ways. First, the money that landed in the bank is not your full income, so your return must be built from what you invoiced, not what arrived. Second, your limited company has to sort the deducted money out with HMRC after its returns are in, and getting that reconciliation right is genuinely fiddly. We will be straight with you: if CIS deductions have been taken from your company's payments this year, that part is an accountant's job, and a good one will earn their fee on it. Domestic work billed straight to homeowners is normally outside all of this.

What does filing actually look like?

HMRC's own free filing service has closed, so every company now files through commercial software. With SimpleReturns, you upload the company's bank statement, answer a few plain-English questions (no accounting words, we promise), and check the figures on one screen before anything goes anywhere. We then file both things every trade company owes: the tax return to HMRC and the accounts to Companies House. It is free to start, no card needed, and £99 flat when you file.

One deadline to respect: file late and the penalty is £200 from the very first day. Put your year end in the phone now and give yourself a clear evening well before it.

Common questions

Do I still have to file if my trade company made a loss this year?

Yes. Every company that gets a notice to deliver must send a Company Tax Return to HMRC within 12 months of its year end, plus a set of accounts, even in a year it made a loss.

Can my company claim the van?

Yes. A van bought for the business normally qualifies for a full deduction against profits in the year you buy it, and while the company owns it the fuel, insurance and repairs are company running costs. Real private use can bring a benefit-in-kind charge, so check that with an accountant.

Can I claim my work clothes?

Protective kit and branded uniform, like hard hats, steel toecaps, hi-vis and goggles, are claimable. Ordinary clothes are not, even if you only ever wear them for work.

What is the CIS trap I need to check?

If any of your work is subcontracting for a builder, the contractor may take money off your payments, usually 20%, or 30% if you are not registered, and pass it to HMRC. Your return then has to be built from what you invoiced, not what reached the bank, and sorting the deducted money out is an accountant's job.

When does my trade company have to register for VAT?

When the company's takings go over £90,000 across any rolling 12-month period, not just your accounting year. Materials you bill on count towards that line, so tradespeople reach it sooner than they expect.

Ready to file your trade company's return?

Upload the company's bank statement, answer a few plain-English questions with no accounting words, and check every figure on one screen. We build your accounts and CT600, then file both the tax return to HMRC and the accounts to Companies House. Free to start, no card needed, and £99 flat when you file.

Start your return

And if CIS money has been deducted from your payments this year, get an accountant to reconcile that first; we would rather tell you that plainly than pretend software solves it.

General guidance, not advice. This guide explains how the rules generally work for small UK limited companies. It isn't tax advice for your specific situation, if you're unsure, check with us or an accountant.