CIS deductions and refunds, allowable expenses, van and tool costs, mileage, VAT, NIC and MTD for Income Tax explained for self-employed block pavers and groundworkers.
A driveway paver's tax position is shaped by two things: heavy materials and the Construction Industry Scheme. A single block-paving job can swallow hundreds of pounds of setts, sub-base, sharp sand, cement and membrane before you have earned a penny of profit, and plate compactors, cut-off saws or a mini-digger often come from a hire yard. At the same time, if you lay drives for builders, developers or larger paving firms, they are deducting tax from your pay before it reaches you.
That combination means most self-employed pavers overpay tax during the year through CIS and then reclaim it at Self Assessment. Get your receipts and your CIS deduction statements in order as the season runs, and the annual return turns into a refund rather than a headache. This guide covers how your profit is taxed, the specific expenses for this trade, CIS, NIC, VAT and the MTD timetable.
As a sole trader you pay Income Tax on profit, which is your total paving income 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, with Class 2 NIC settled through Self Assessment.
Scottish pavers pay Scottish Income Tax on their profit through six bands (19%, 20%, 21%, 42%, 45% and a 48% top rate) and carry an S-prefixed tax code, while National Insurance stays UK-wide. Welsh pavers have a C-coded tax code at rates currently matching the rest of the UK. If you also have a PAYE job or your CIS history has confused your record, your code can end up wrong, so run it through the tax code checker.
Laying block paving, kerbs, edgings, drainage channels and the groundwork beneath a drive is construction work, so when you do it for a contractor, developer or larger landscaping firm you are a subcontractor under the Construction Industry Scheme. Before they pay you, they deduct tax from the labour element of your invoice and hand it to HMRC. Register for CIS and the rate is 20%; fail to register and it jumps to 30%, so registering is the first thing to do.
The deduction is only on labour, not on materials, so it is vital that your invoices split the two. If you lump GBP 2,000 of blocks and sub-base in with your labour, the contractor may deduct 20% from the whole lot and you have effectively lent HMRC GBP 400 against material you only passed on at cost. Always itemise materials separately.
Because CIS is taken from labour before any expenses or your personal allowance are applied, registered pavers almost always overpay through the year and are due a refund at Self Assessment. Keep every monthly CIS deduction statement from each contractor, total them, and HMRC sets that figure against your final bill. Our CIS subcontractor guide explains the mechanics in full, and the CIS tax calculator shows roughly what refund to expect.
When you work directly for householders laying a private drive, CIS does not apply. There is no contractor to deduct anything, so you receive the full payment and settle the tax yourself through Self Assessment. Many pavers run both: domestic drives direct to homeowners and subcontract work for builders, and only the latter carries CIS.
An expense is allowable when incurred wholly and exclusively for the business. Paving is materials- and equipment-heavy, so this is where a big chunk of your turnover legitimately disappears before tax.
| Expense | What qualifies | Notes |
|---|---|---|
| Van and vehicle | Fuel or mileage, insurance, road tax, servicing, repairs, MOT | Use simplified mileage at 45p/25p, or a business proportion of actual running costs |
| Materials | Block paving, setts, kerbs, sub-base, MOT type 1, sharp sand, cement, jointing sand, membrane, edging | Invoice these to CIS contractors separately from labour |
| Plant and tools | Plate compactor (wacker), cut-off saw, breaker, mini-digger, levels, string lines, trowels, screed rails | Bought tools usually claimed in full via the Annual Investment Allowance |
| Plant and skip hire | Daily hire of compactors, dumpers, diggers, and muck-away skips | Fully deductible running cost |
| Consumables | Cutting and grinding blades, drill bits, fixings, fuel for plant, marking paint | Frequent replacement, keep till receipts |
| PPE and workwear | Steel-toe boots, knee pads, gloves, hi-vis, ear defenders, dust masks, safety glasses | Protective gear is allowable; ordinary clothing is not |
| Insurance | Public liability, tool cover, van insurance | Essential and fully deductible |
| Certification | CSCS card, plant tickets, first aid, relevant training | Renewals and skills updates qualify |
| Phone and admin | Business share of phone, quoting software, accountancy and bank fees | Apportion private use out |
| Home as office | Flat-rate working-from-home allowance for quoting, invoicing and paperwork | Choose the larger of flat-rate or a fair actual proportion |
Your vehicle is usually the second-largest cost after materials. You can use HMRC's simplified mileage rate (45p per mile for the first 10,000 business miles, then 25p) which is simple and needs only a mileage log, or claim a business proportion of actual running costs plus capital allowances on the van itself. A paver running a heavily loaded van to merchants and sites every day, towing a plant trailer, often does better on actual costs, so work it out both ways once. You cannot switch between methods for the same vehicle once you have chosen.
Tools and plant you buy outright, a plate compactor, a cut-off saw, a breaker, are normally written off in full in the year of purchase through the Annual Investment Allowance rather than spread over years. Plant you hire by the day is simply a running cost deducted as you go.
The private share of your van, fuel and phone must be stripped out. Ordinary clothing is never allowable even if you only wear it on site; only genuine PPE and branded workwear count. Travel from home to a regular base is commuting and not deductible, though travelling between job sites and to suppliers is. Fixed-penalty parking and speeding fines are never allowable, and meals are only claimable in limited overnight or genuinely itinerant circumstances.
Take a subcontract block paver invoicing builders, with GBP 55,000 of gross income for the year, of which GBP 20,000 was materials billed separately and GBP 35,000 was labour subject to 20% CIS.
Turnover: GBP 55,000 (labour GBP 35,000, materials GBP 20,000)
CIS deducted at source: 20% of GBP 35,000 labour = GBP 7,000 already paid to HMRC
Allowable expenses:
Taxable profit: GBP 55,000 minus GBP 31,200 = GBP 23,800
Income Tax: GBP 23,800 minus GBP 12,570 = GBP 11,230 at 20% = GBP 2,246
Class 4 NIC: GBP 11,230 at 6% = GBP 674
Tax and NIC due: GBP 2,920. But GBP 7,000 of CIS was already deducted, so HMRC owes a refund of roughly GBP 4,080. That is the typical paver's story: a healthy repayment once expenses and the personal allowance are applied. Check your own figures with the sole trader tax calculator and the CIS calculator before you file.
For a CIS paver the refund is real money you have already handed over. Split materials from labour on every invoice, keep your deduction statements, and claim every blade, bag of sand and mile of fuel.
You must register for VAT once taxable turnover exceeds GBP 90,000 in any rolling 12-month period. A paving business reaches this faster than many trades because the materials you buy and re-bill inflate your turnover: a run of larger drives can carry you past the threshold on volume alone. Watch the rolling 12-month figure, not just the tax year.
Once registered, how you handle VAT depends on who you work for. Selling directly to householders, you charge VAT normally on the whole job. Subcontracting to VAT-registered contractors, the construction domestic reverse charge usually applies, meaning you do not charge them VAT; instead they account for it themselves, and your invoice states that the reverse charge applies. This protects your cash flow but changes your paperwork, so flag any contractor work to your accountant before you invoice.
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 CIS work that is your turnover before any deductions:
For a paver this is a real shift. Instead of pulling a shoebox of merchant receipts and CIS statements together each January, you record materials, fuel, hire and invoices digitally as the season runs and send HMRC a quarterly summary. The upside is that capturing costs as they happen makes your refund position clearer all year, not just at filing. Our guide to MTD for sole traders walks through the quarterly rhythm in practice.
Not splitting materials from labour on CIS invoices. Lump them together and the contractor deducts 20% from your materials too, lending HMRC money you have to reclaim later.
Staying unregistered for CIS. The deduction rate is 30% rather than 20% until you register, tying up even more of your cash.
Losing CIS deduction statements. Without them you cannot prove the tax already paid, and your refund stalls. Keep every monthly statement from every contractor.
Forgetting plant hire and consumables. Daily compactor and skip hire and a steady stream of blades and fixings add up to a serious deduction that pavers often under-record.
Mixing van private use into the claim. Claim only the business share of fuel, insurance and running costs, and keep a mileage log to back it up.
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