Self-Employed Painter & Decorator
Tax & MTD Guide

If you sub-contract on a building site or a larger refurbishment project, the contractor you work for is almost certainly deducting tax from your labour invoices before you see a penny. That deduction is 20% if you are registered under the Construction Industry Scheme (CIS) and a punishing 30% if you are not. For a decorator invoicing GBP 33,000 of labour in a year, the difference between those two rates is GBP 3,300 taken off you unnecessarily. Getting that one thing right will save you more than any other tax decision you make.

How Tax Works for a Self-Employed Painter and Decorator

As a sole trader you pay Income Tax on your profits (turnover minus allowable expenses), not on your total turnover. You also pay Class 4 National Insurance Contributions: 6% on profits between GBP 12,570 and GBP 50,270, then 2% above that. Below GBP 12,570 you pay no Income Tax and no Class 4 NIC at all, though you may want to make voluntary Class 2 NIC contributions to protect your State Pension.

If most of your work comes from contractors rather than direct domestic clients, the CIS mechanism means you are effectively paying tax in instalments throughout the year, deducted at source. You still need to file a Self Assessment return each January, but your tax bill will be reduced pound for pound by the CIS already deducted. If more was deducted than you owe, HMRC repays the difference. Use the CIS tax calculator to see where you stand before you file.

Domestic Clients vs CIS Sub-Contract Work

The distinction matters practically every week. When Mrs Sharma asks you to repaint her living room, that is a private domestic job; there is no CIS deduction and you invoice the full amount. When you sub-contract on a developer's apartment refurbishment, the main contractor must deduct CIS from the labour element of every payment. Keep the two income streams in separate categories in your records; this makes your Self Assessment far simpler and demonstrates clearly to HMRC which income has already had tax deducted.

Allowable Expenses for Painters and Decorators

This is where painters and decorators routinely leave money on the table. Every GBP 1 of legitimate expense reduces your taxable profit by GBP 1; at the basic rate that is 20p of Income Tax saved. The expenses below are the ones specific to your trade that HMRC accepts as wholly and exclusively for business purposes.

One category painters specifically under-claim is small sundries: the roll of masking tape grabbed from a hardware store, the pack of plastic sheeting, the bottle of white spirit. Each receipt is small; cumulatively they can be GBP 400 to GBP 800 a year. Keep a simple envelope or phone photo habit for every receipt and they add up to a meaningful reduction in your tax bill.

CIS: The Deduction That Defines This Trade

Painting and decorating carried out within a construction or refurbishment contract is squarely within CIS. That covers everything from a residential developer's new-build fit-out to a commercial office refurbishment to a school repainting contract. It does not cover one-off domestic redecorating where you work directly for a homeowner with no main contractor involved.

When you are working under CIS, split every invoice clearly: labour on one line, materials on another. Contractors are only required to deduct CIS from the labour element. If you invoice GBP 4,000 for a job comprising GBP 2,500 labour and GBP 1,500 of paint and materials, the contractor deducts 20% of GBP 2,500 only (GBP 500), not 20% of the full GBP 4,000 (GBP 800). That distinction is worth hundreds of pounds across a busy year.

You should receive a CIS deduction statement from each contractor for every payment. Store these carefully; you need them to offset against your Self Assessment liability. If a contractor fails to give you statements, chase them; HMRC requires contractors to provide them.

VAT for Painters and Decorators

Painting and decorating is standard-rated at 20% for VAT purposes in almost every scenario you will encounter. The main exception is decorating work that forms part of a qualifying new residential build, which can be zero-rated. In practice most painters and decorators encounter this only on large housebuilder sites where the main contractor manages the VAT position; if you are ever in doubt, ask the main contractor before you issue your invoice.

Once your taxable turnover in any rolling 12-month period reaches GBP 90,000, you must register for VAT. For a busy sole trader with both domestic and CIS work, that threshold can creep up. Review your rolling turnover every quarter; registering late carries a penalty. When you do register, VAT on your paint, materials and other business purchases becomes recoverable as input tax, which can be a genuine cash benefit if your materials spend is substantial.

Worked Example: A Decorator on GBP 33,000 Turnover

Take a self-employed decorator who invoices GBP 33,000 across the year, the majority coming from CIS sub-contract work for a local refurbishment contractor. The labour element of those invoices totals GBP 24,000; the rest is materials recharged at cost.

The contractor has deducted 20% CIS on the labour: GBP 24,000 x 20% = GBP 4,800 already paid to HMRC.

Now, allowable expenses:

Taxable profit: GBP 33,000 minus GBP 8,180 = GBP 24,820

Personal allowance: GBP 12,570. Taxable income above allowance: GBP 12,250.

Income Tax at 20%: GBP 12,250 x 20% = GBP 2,450

Class 4 NIC at 6%: GBP 12,250 x 6% = GBP 735

Total liability: GBP 2,450 + GBP 735 = GBP 3,185

CIS already deducted at source: GBP 4,800

Result: GBP 4,800 minus GBP 3,185 = GBP 1,615 repayable by HMRC.

That repayment only materialises if you file your Self Assessment return and claim it. Use the sole trader tax calculator to run your own numbers before the January deadline. If you also have PAYE employment alongside your decorating income, your tax code may already be accounting for some of this; check your tax code to make sure HMRC has not over-collected through your employed income too.

MTD for Income Tax: What Changes for Decorators

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) replaces the annual Self Assessment return with quarterly digital submissions for most self-employed people. If your self-employment income (plus any property income) exceeds GBP 50,000, you must comply from April 2026. The threshold drops to GBP 30,000 from April 2027.

For a painter and decorator this means keeping digital records of every invoice raised, every expense receipt and every CIS deduction statement throughout the year, then submitting a quarterly summary to HMRC via MTD-compatible software. The annual Self Assessment element still exists as a final year-end declaration, but the old once-a-year scramble is replaced by four smaller submissions.

The practical upside: if you are owed a CIS repayment, quarterly reporting will make that clearer earlier in the year, potentially improving your cash flow rather than waiting until January for a refund.

Common Mistakes Painters and Decorators Make

Not registering for CIS before starting sub-contract work. This is by far the most expensive single mistake in this trade. Every contractor you work for is required by HMRC to verify your CIS status before paying you. If they cannot confirm you are registered, they must deduct 30% from your labour payments rather than 20%. On GBP 24,000 of labour that is GBP 7,200 deducted versus GBP 4,800 if you are registered: an unnecessary GBP 2,400 overpaid to HMRC that you will only recover many months later via a tax return. Register at GOV.UK before you start your first sub-contract job.

Including materials in the CIS deduction calculation. Some contractors, especially smaller ones, deduct CIS from the entire invoice rather than just the labour element. This is the contractor's error, but it costs you money until you reclaim it. Invoice clearly with labour and materials on separate lines, and if a contractor still deducts from the full amount, correct it in writing.

Mixing up domestic and CIS income in records. Domestic client payments and CIS sub-contract receipts need to be tracked separately from day one. Muddling them means you cannot easily reconcile your CIS deduction statements at year end, which delays filing and can lead to errors in the repayment you are owed.

Claiming the whole van when it is also used privately. If your van doubles as personal transport at weekends, HMRC will disallow the private proportion of running costs. Either use the mileage rate (which automatically covers only business trips) or keep a mileage log so you can calculate the business percentage accurately if you claim actual costs.

Forgetting to save for the payment on account. If your first Self Assessment bill exceeds GBP 1,000, HMRC requires you to make payments on account for the following year at the same time. First-time filers who have not budgeted for this can find themselves owing 150% of the bill they expected. Set aside around 25-30% of profit as you go.

People also ask

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