CIS deductions and refunds, allowable tools and van costs, VAT on labour and materials, National Insurance and MTD explained for self-employed UK bathroom fitters.
For a self-employed bathroom fitter, the tax picture is shaped by two things the desk-bound trades never deal with: the Construction Industry Scheme taking a slice of your money before you even see it, and a constant flow of materials and tools moving through your books. You quote a full bathroom, buy the suite, the tiles, the screen and the fittings, fit it over a week, invoice the customer or the main contractor, and somewhere in that process 20% of your labour may already have been deducted and paid to HMRC on your behalf.
That up-front deduction is the single biggest reason bathroom fitters get this wrong, and also the reason most of them are owed money. Get your records straight on tools, van mileage and materials, understand how CIS reconciles at the end of the year, and the annual return turns from a worry into a refund. This guide walks through exactly how your profit is taxed, the expenses specific to this trade, and the VAT and MTD rules that catch installers out.
As a sole trader you pay Income Tax on profit: your total income (labour plus any materials you invoice) minus allowable expenses. For 2025/26 the personal allowance covers the first GBP 12,570, then you pay 20% to GBP 50,270, 40% to GBP 125,140 and 45% above, with the personal allowance tapering away between GBP 100,000 and GBP 125,140 to create an effective 60% band. Class 4 National Insurance is 6% on profit between GBP 12,570 and GBP 50,270 and 2% above, while Class 2 NIC is settled through Self Assessment.
The crucial point for a CIS subcontractor is that tax is charged on profit, not on the money that lands in your account. The 20% already deducted is calculated on your gross labour before any expenses, so it almost always overshoots the tax actually due. That gap is what comes back to you.
Scottish fitters pay Scottish Income Tax through six bands (19%, 20%, 21%, 42%, 45% and a 48% top rate) and carry an S-prefixed tax code; National Insurance stays UK-wide. Welsh fitters have a C-coded tax code at rates currently matching the rest of the UK. If a previous employment or a coding error has left your code looking odd, run it through the tax code checker.
If you fit bathrooms for property developers, builders or larger contractors rather than directly for homeowners, you are almost certainly working under the Construction Industry Scheme. The contractor is required to deduct tax from your labour before paying you and hand it to HMRC.
The mechanics matter. Always register for CIS so you are deducted at 20% rather than 30%. Make sure your invoices split labour and materials clearly, because the deduction applies to labour only, materials should be invoiced separately and pass through deduction-free. Keep every CIS deduction statement (payment and deduction statement) the contractor gives you, because those statements prove how much has already been paid to HMRC on your behalf.
At year end your Self Assessment totals the tax and Class 4 NIC due on your actual profit, then subtracts the CIS already deducted. Since the deductions were taken before your tools, van and materials reduced your profit, the result is usually a repayment. Use the CIS tax calculator to estimate your refund, and read our fuller CIS subcontractor guide for how the scheme reconciles in detail.
If you also engage other subcontractors, say a plumber or tiler you bring onto a job, you may be a contractor yourself and have to verify and deduct from them, which adds CIS reporting obligations of its own.
An expense is allowable when it is incurred wholly and exclusively for the business. For a bathroom fitter the list is dominated by tools, the van and materials rather than office costs.
| Expense | What qualifies | Notes |
|---|---|---|
| Power and hand tools | Tile cutter, wet saw, SDS drill, multi-tool, levels, grout floats, sealant guns | Usually claimed in full via the Annual Investment Allowance |
| Consumables | Blades, drill and core bits, grout, adhesive, silicone, screws, fixings, masking | Fully deductible as used on jobs |
| PPE and workwear | Knee pads, gloves, safety goggles, dust masks, ear defenders, steel-toe boots, branded overalls | Protective and branded kit only, not everyday clothes |
| Van and travel | Fuel, insurance, road tax, repairs and servicing, or 45p/25p mileage | Pick actual costs or mileage, not both, for the same van |
| Materials | Suites, tiles, screens, taps, panels and fittings you buy and supply | Claim as expense; under CIS these pass deduction-free |
| Insurance | Public liability and tool insurance | Essential cover, fully allowable |
| Home admin and phone | Fair share of home costs for quoting, ordering and invoicing, business phone | Use the flat rate or a reasonable proportion |
| Trade memberships | Relevant trade body or scheme fees | Allowable where related to the trade |
| Training and CPD | Courses that update existing skills, e.g. wet-room or part-P related | Training into a brand-new trade is not allowable |
| Accountancy and bank fees | Bookkeeping, Self Assessment, business banking | Fully deductible |
Bathroom fitting is tool-heavy, and this is where the trade differs sharply from desk-based work. A serious wet saw, an SDS drill, a tile leveling system and a quality set of hand tools add up. Most tools are claimed in full in the year you buy them through the Annual Investment Allowance, so a GBP 1,200 outlay on a saw and drill reduces this year's profit by the full GBP 1,200. Small consumables like blades, adhesive and silicone are simply running costs deducted as you use them. Keep receipts for everything, including cash purchases from the merchant counter, because these are the deductions that turn your CIS overpayment into a refund.
Your van is usually your second-biggest expense after tools. You have two methods. The simplified flat rate gives you 45p per business mile for the first 10,000 miles in the tax year and 25p after that, covering fuel, insurance, repairs and depreciation in one figure, which is simple if you keep a mileage log. Alternatively you claim the actual running costs (fuel, insurance, road tax, MOT, servicing and repairs) plus capital allowances on the van itself. You must stick to one method for the life of that van. A fitter racking up heavy miles between jobs and the merchant often does better on actual costs; one with a newer, lightly used van often does better on mileage. Travel between your home or yard and a job is allowable; ordinary commuting to a single fixed workplace is not.
The private share of dual-use van miles, phone and home costs must be excluded. Everyday clothing is never allowable even if you wear it on site; only protective or branded workwear counts. Tools you buy for personal DIY at home are out. And materials a customer pays for directly are not your expense, only materials you buy and supply yourself.
Take a fitter doing developer work under CIS, invoicing GBP 45,000 of labour across the year (materials are invoiced separately and pass through), with 20% deducted at source.
CIS deducted during the year: GBP 45,000 at 20% = GBP 9,000 already paid to HMRC
Allowable expenses:
Taxable profit: GBP 45,000 minus GBP 9,600 = GBP 35,400
Income Tax: GBP 35,400 minus GBP 12,570 = GBP 22,830 at 20% = GBP 4,566
Class 4 NIC: GBP 22,830 at 6% = GBP 1,370
Tax and NIC due: GBP 5,936. Against this sits GBP 9,000 of CIS already deducted, so the fitter is due a refund of roughly GBP 3,064 (before any Class 2 NIC and Student Loan adjustments). Run your own figures through the sole trader tax calculator or the CIS calculator to see your likely position.
For a CIS bathroom fitter the refund lives in the receipts. Every tool, every tank of fuel and every box of silicone you log is profit you have already been over-taxed on, waiting to come back at Self Assessment.
You must register for VAT once taxable turnover exceeds GBP 90,000 in any rolling 12-month period. Bathroom fitters reach this sooner than many trades because suites, tiles, screens and fittings push material value through your turnover. If you supply the materials and invoice them on, that material value counts towards the threshold, so watch the rolling 12-month figure rather than waiting for the tax-year total.
If you do register, the domestic reverse charge for construction matters. For most CIS construction services supplied to a VAT-registered contractor, you do not charge VAT on your invoice; the contractor accounts for it under the reverse charge. You still reclaim VAT on your own tools, van and materials. When you work directly for homeowners (end users), normal VAT rules apply and you charge VAT as usual. Note that certain qualifying work, such as installing adapted bathrooms for disabled or elderly customers, can be zero-rated or reduced-rated, so check the specific scheme before pricing.
Making Tax Digital for Income Tax Self Assessment replaces the once-a-year return with quarterly digital submissions and a year-end finalisation. The thresholds are based on gross income, not profit, and for a CIS subcontractor gross means your labour and materials before any CIS deduction:
Because materials inflate gross turnover, plenty of bathroom fitters who think of themselves as small will be over the GBP 50,000 line on gross income from April 2026. Instead of bagging up a shoebox of receipts each January, you record each invoice, fuel stop and tool purchase digitally as you go and send HMRC a quarterly summary. For a busy fitter on site all day, capturing receipts at the merchant counter on a phone is far less painful than a year-end scramble. Our guide to MTD for sole traders walks through what the quarterly rhythm looks like in practice.
Not registering for CIS. Working un-registered means a 30% deduction instead of 20%, tying up even more of your cash until you file. Register and get the lower rate.
Failing to split labour and materials on invoices. CIS deductions apply to labour only. If materials are not separated, contractors may deduct from the whole invoice, over-deducting from you.
Losing cash receipts from the merchant. Counter purchases of grout, silicone and fixings are real expenses. No receipt, no deduction, and a smaller refund.
Forgetting VAT turnover includes materials. Pass enough suites and tiles through your books and you cross GBP 90,000 on materials alone without realising.
Treating CIS as your final tax. The 20% deducted is an advance, not the bill. File your Self Assessment to reconcile it, otherwise you leave a refund sitting with HMRC.
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