If you wire houses, fit consumer units or run cable on commercial sites, your tax bill is mostly decided by two things: what you claim as an expense, and how your CIS deductions land at the end of the year. Get both right and you keep more of what you earn. Get them wrong and you either overpay or invite an HMRC enquiry.
This guide is for self-employed electricians and electrical contractors in England, Wales and Northern Ireland working as sole traders. We'll cover what you can claim for tools, your van and travel, how the Construction Industry Scheme (CIS) affects your cash flow, and how it all comes together on your tax return.
All figures are for the 2025/26 tax year and come straight from gov.uk. Let's get into it.
What tax do self-employed electricians pay?
As a self-employed electrician you pay Income Tax and Class 4 National Insurance on your profit, not your turnover. Profit is what's left after you take your allowable expenses off your income.
The first slice of profit is covered by your Personal Allowance, the amount you can earn tax-free. For 2025/26 that's £12,570. Above that, the bands work like this:
| Band | Taxable income (2025/26) | Income Tax rate |
|---|---|---|
| Personal Allowance | First £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
The basic-rate band covers the next £37,700 of taxable income above the allowance, and the higher rate starts once your total income passes £50,271. These thresholds are confirmed on the gov.uk Income Tax rates page.
On top of Income Tax you pay Class 4 National Insurance on profits between the Lower Profits Limit of £12,570 and the Upper Profits Limit of £50,270, at 6% for 2025/26. Profits above £50,270 are charged at 2%. You can check these on the self-employed National Insurance page.
(Scotland sets its own Income Tax rates and bands, so if you're a Scottish taxpayer the figures above don't apply to you. National Insurance is the same across the UK.)
What expenses can an electrician claim?
You can claim costs that are "wholly and exclusively" for the business. For most electricians that's a healthy list. HMRC's own expenses guidance sets out the categories, and here's how they map to a sparky's day-to-day spend:
- Tools and equipment - testers, drills, crimpers, multimeters, ladders, a van rack.
- Materials - cable, sockets, consumer units and the rest, where you buy them rather than the main contractor.
- Protective and branded clothing - safety boots, hi-vis, gloves and a uniform with your logo.
- Vehicle and travel - running your van, plus parking and tolls on business trips.
- Phone, internet and admin - the business share of your mobile and broadband, stationery, postage.
- Professional costs - public liability insurance, NICEIC or similar scheme membership, trade body fees, accountancy.
- Training - courses that update or refresh skills for your existing trade, such as a wiring regulations update.
- Use of home - a slice of your home running costs if you do quotes and paperwork there.
A word on clothing, because it trips people up. You can claim protective clothing and a branded uniform, but you cannot claim everyday clothes even if you only wear them for work. That's HMRC's line, set out in its clothing expenses guidance. So your safety boots are fine; the jeans you happen to wear on site are not.
For working from home, you can either work out the actual business share of your bills, or use HMRC's flat rate based on hours worked at home each month: £10 for 25 to 50 hours, £18 for 51 to 100 hours, and £26 for 101 hours or more. The flat rate covers heat, light and power but not phone or broadband. See the working from home simplified expenses page.
In practice, the mistake we most often see is electricians underclaiming, not overclaiming. Small recurring costs (insurance, scheme fees, the business share of your phone) add up fast, and a tidy bookkeeping routine is the easiest way to make sure none of it slips through.
How do you claim for tools and equipment?
Tools split into two buckets, and the difference matters.
Smaller, consumable kit (hand tools, a cheap drill, consumables) is usually treated as a day-to-day running cost and goes straight into your expenses for the year.
Larger, longer-lasting equipment (a serious test set, a powerful drill, a generator) counts as a capital purchase. You claim these through capital allowances. The good news for electricians is the Annual Investment Allowance (AIA), which lets you deduct 100% of the cost of qualifying plant and machinery in the year you buy it, up to £1,000,000 a year. Unless you're buying a fleet of expensive kit, that means your tools are effectively fully deductible in year one.
So whether a tool is a "running cost" or a "capital allowance", the practical result is usually the same: you get tax relief on the full cost. The split mainly affects how it's recorded, not how much you save. Keep every receipt either way.
How do you claim for your van and mileage?
This is where electricians have a genuine choice, and it's worth getting right because you're locked into your choice for the life of that vehicle.
Option 1: simplified mileage. You claim a flat rate per business mile that covers fuel, servicing, insurance and wear and tear. The rates are 45p per mile for the first 10,000 business miles in the year, then 25p per mile after that. Motorcycles are 24p. These are HMRC's simplified expenses vehicle rates. You just log your business miles. You cannot use this method for a vehicle you've already claimed capital allowances on.
Option 2: actual costs plus capital allowances. You claim the business share of everything you actually spend (fuel, insurance, repairs, MOT, road tax) and claim capital allowances on the purchase price of the van. A van bought for the business usually qualifies for the AIA, so you can often write off most of the purchase in year one.
Which wins? As a rough rule, high-mileage electricians in an older, cheaper van often do better on mileage, while those who've just bought a newer, more expensive van and don't rack up huge miles often do better on actual costs because of the capital allowance. You can model both with our mileage calculator before you commit.
Two things to remember. Commuting from home to a fixed regular workplace is not business travel. And whichever method you pick, a simple mileage log (date, journey, miles, reason) is your evidence if HMRC ever asks.
How does CIS work for electricians?
If you do electrical work for a contractor on a construction project, your work usually falls under the Construction Industry Scheme. Under CIS, the contractor takes a deduction from the labour part of your invoice and pays it to HMRC on your behalf. Materials are not subject to the deduction.
The rate depends on your CIS status, as set out in HMRC's CIS subcontractor guidance:
| Your CIS status | Deduction from labour | Effect |
|---|---|---|
| Registered (net) | 20% | Standard rate for registered subcontractors |
| Not registered | 30% | Higher rate until you register |
| Gross payment status | 0% | Paid in full; you settle tax via Self Assessment |
The key point: these deductions are advance payments towards your Income Tax and National Insurance. They are not an extra tax. When you file your Self Assessment, you total up the CIS deducted across the year, set it against your actual tax bill, and HMRC refunds the difference if too much was taken. For most self-employed electricians, too much is taken, so a refund is common.
So the first job is always to register for CIS as a subcontractor, which drops your deduction from 30% to 20%. The second, once your business is established, is to consider gross payment status so you're paid in full and manage your own tax. To qualify you broadly need to pass three tests: a business test (you do construction work in the UK through a bank account), a turnover test (at least £30,000 of labour turnover in the last 12 months for a sole trader), and a compliance test (your tax and returns have been on time). The detail is on the gross payment status guidance.
If CIS and Self Assessment feel like a maze, that's exactly the kind of work our self-assessment service handles for trades every January.
Illustrative example: an electrician's tax and CIS refund
Illustrative example. Dan is a self-employed, CIS-registered electrician working mainly as a subcontractor in 2025/26. His figures:
- Labour invoiced to contractors: £52,000
- Allowable expenses (tools, van, insurance, phone, use of home): £14,000
- Profit: £52,000 - £14,000 = £38,000
His tax and National Insurance on that profit:
| Calculation | Amount |
|---|---|
| Profit | £38,000 |
| Less Personal Allowance | -£12,570 |
| Taxable profit | £25,430 |
| Income Tax at 20% on £25,430 | £5,086.00 |
| Class 4 NIC at 6% on £25,430 | £1,525.80 |
| Total tax and NIC due | £6,611.80 |
Now the CIS part. Because Dan is registered, contractors deducted 20% from his £52,000 of labour during the year, which is £10,400 paid to HMRC on his behalf.
| CIS reconciliation | Amount |
|---|---|
| CIS deducted by contractors (20% of £52,000) | £10,400.00 |
| Less total tax and NIC due | -£6,611.80 |
| Refund due to Dan | £3,788.20 |
Dan's contractors had already handed HMRC more than his actual bill, so once he files his return he's owed £3,788.20 back. That's typical for subcontractor electricians, and it's why filing promptly after 6 April is worth it: the sooner you file, the sooner the refund lands. You can sanity-check your own numbers with our self-employed tax calculator.
(Figures are illustrative and rounded for clarity. Your position depends on your actual income, expenses and any other income.)
Frequently asked questions
Do electricians have to register for CIS?
If you work as a subcontractor for contractors on construction projects, you should register for CIS as a subcontractor. You can still be paid if you don't, but the contractor must deduct 30% from your labour instead of 20%, so registering improves your cash flow. Registration is via gov.uk.
Can I claim my work van as a tax expense?
Yes. You can either claim simplified mileage at 45p per business mile for the first 10,000 miles and 25p thereafter, or claim the business share of your actual running costs plus capital allowances on the van itself. You pick one method per vehicle and stick with it for that vehicle's life.
Can an electrician claim for tools on tax?
Yes. Smaller tools are usually claimed as a running cost in the year you buy them, and larger equipment is claimed through capital allowances. Thanks to the Annual Investment Allowance of up to £1,000,000 a year, most electricians effectively get full tax relief on their tools in the year of purchase. Keep all receipts.
Why do I get a tax refund as a CIS electrician?
Because CIS deductions are taken at a flat 20% of your labour, with no account taken of your Personal Allowance or your expenses. Once you file your Self Assessment and apply your allowance and costs, your actual bill is usually lower than what was deducted, so HMRC refunds the difference.
When do I need to file my Self Assessment as an electrician?
The online filing deadline is midnight on 31 January following the end of the tax year, and that's also when any balancing payment is due. So for 2025/26 you file and pay by 31 January 2027. The deadlines are on the gov.uk Self Assessment page.
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Want help claiming everything you're owed?
Most self-employed electricians overpay through CIS and underclaim on expenses. Zmartly handles the CIS reconciliation, expense claims and Self Assessment so you get the right refund without the January panic. Book a free call with a Zmartly accountant who works with trades, or see how we support electrical contractors.
