Tax for electricians and tradespeople

If you're a self-employed sparky, plumber, joiner or builder, your tax has one extra wrinkle most trades don't: the Construction Industry Scheme. Here's the whole picture, plainly.

As a self-employed trade you file a Self Assessment return once your earnings pass £1,000 a year, and pay tax on your profit after costs.

How much tax will you actually pay?

You're taxed on your profit — your income after allowable costs — not on everything you take. For the 2026/27 tax year:

• The first £12,570 is tax-free (your personal allowance).
• 20% income tax on profit between £12,570 and £50,270.
• 6% Class 4 National Insurance on that same slice — Class 2 is treated as paid automatically.
• Above £50,270 it steps up to 40% tax and 2% National Insurance.

A worked example. Say your profit after materials, tools and van costs is £30,000, and it's your only income. Nothing on the first £12,570, then 20% tax on the £17,430 above it (£3,486) and 6% Class 4 NI (£1,046) — about £4,532. If you've had CIS deductions taken off your pay through the year (below), those come off this bill — and often more than cover it, leaving a refund.

If you also have an employed job, that salary usually uses your personal allowance first, so more of your self-employed profit is taxed — we work out both sides together. Our how-much-tax guide has the full breakdown.

The Construction Industry Scheme (CIS)

If you work as a subcontractor for other builders or contractors, they usually have to deduct tax from your pay before you get it — typically 20% if you're registered for CIS (more if you're not) — and send it to HMRC on your behalf.

Costs you can usually claim

• Tools and equipment — and replacing them when they wear out or break.
• Protective clothing and PPE — boots, gloves, hi-vis, hard hats.
• Your van — mileage at 55p per mile for the first 10,000 miles and 25p after, or actual running costs plus capital allowances on the van.
• Materials and consumables you buy for jobs.
• Public liability and tool insurance.
• Trade body membership and keeping your existing qualifications up to date.
• Phone, admin and accountancy fees.

How to file, step by step

• 1. Register with HMRC for Self Assessment by 5 October after the tax year you started. You'll get a UTR (Unique Taxpayer Reference). Here's how →
• 2. Keep records through the year — what you earned, and receipts for what you spent.
• 3. File your return online by 31 January (or on paper by 31 October). The dates that matter →
• 4. Pay what you owe by 31 January.

Making Tax Digital

Making Tax Digital is already here: since 6 April 2026 it applies if your gross self-employment and property income — your turnover, before expenses — was over £50,000. The threshold drops to £30,000 in April 2027 and £20,000 in April 2028. It means keeping digital records and sending HMRC a short update every quarter — 7 August, 7 November, 7 February and 7 May — on top of your year-end return. We keep the records, file the quarters and reconcile your CIS deductions at the year end.

Common questions

How does CIS work for electricians? If you subcontract for other builders they deduct tax from your pay — usually 20% if you're registered for CIS — and send it to HMRC. Because it's taken off before expenses, many trades overpay through the year and are due a refund when their return is filed.

What can electricians claim as expenses? Tools and equipment, protective clothing, van costs (55p per mile for the first 10,000 miles from April 2026, or actual running costs), materials, public liability and tool insurance, trade memberships, and phone and accountancy fees.

How much tax do self-employed electricians pay? No tax on the first £12,570, then 20% tax and 6% Class 4 National Insurance on profit above it — for example about £4,532 on £30,000 of profit, before any CIS deductions already taken are set against it.

This guide is general information, not personal tax advice. Figures are for the 2026/27 tax year; CIS, tax rates and allowances can change — always confirm the current position on GOV.UK or ask us to check your situation.