What can a self-employed groundworker claim?
The mini excavator you bought this year, its diesel and tracks, the dumper you hire in, the low-loader that moves the machine, muck-away, drainage and concrete, your CPCS card and your van all come off your profit before tax. Here is how owning plant changes the sums, what a developer deducts when you arrive with your own digger, and a worked year in which the machine brings most of the CIS back.
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What a self-employed groundworker can claim
The excavator you buy outright
A mini or midi excavator, a dumper, a roller or a breaker attachment is plant, and plant is not a car, so the cash basis treats the price as an expense of the tax year you pay it, with no ceiling on what the machine cost and nothing spread over later years. A £21,000 digger paid for in July is £21,000 off that year's profit, less a share for any private use. FileThat's box for plant and equipment is Repairs and maintenance. A groundworker who has opted for traditional accounting claims the same machine through capital allowances instead, where the annual investment allowance covers plant up to £1 million a year.
Finance, buckets and keeping it running
Plant bought on hire purchase is deducted as the instalments leave the account: the deposit and the months paid in this tax year count now, the rest in the year each payment is made, and the interest inside the payments is allowable in full. Buckets, a quick hitch, a breaker, new rubber tracks, pins and bushes, filters and the annual service all sit in Repairs and maintenance beside the machine. A lease under which the digger never becomes yours is a hire charge rather than a purchase, and goes in Other expenses.
Diesel for the digger and the dumper
Construction plant has had to run on full-duty white diesel since 1 April 2022; rebated red diesel is kept for farming, forestry and a short list of other uses, and a dumper on a housing site is not on it. The diesel you put in the excavator and dumper is a running cost of the plant, recorded as Other expenses and kept apart from the van's fuel in Motor and fuel, so it never tangles with a mileage claim. Hydraulic oil, grease and AdBlue go with it. Keep every fuel receipt: they matter to CIS as well, below.
Plant and lorries you hire in
A dumper or roller hired from the yard without a driver, a trench box, a pump for a wet excavation, a skip, and the low-loader or beavertail that shifts your own excavator between sites are hire and haulage charges, and they go in Other expenses together with the delivery fees. Grab lorries and tipper loads taking spoil and hardcore away, and the tip's gate charge, are costs of the job in the same box. Hire a machine with its operator and you are paying for construction work: take CIS off the operator's labour and record the payment as Construction industry - payments to subcontractors.
Drainage, concrete and aggregate
On a developer's site the main contractor usually supplies the materials, so a groundworker on labour and plant may have little in this box. On drives, soakaways and footings for homeowners and small builders, the pipe and chambers, pea shingle, MOT type 1, ready-mix, rebar, mesh, membrane and shuttering timber you buy are Goods for resale, goods used in HMRC's wording, and what you charge for them is turnover. Marker paint, pins and line, blades for the disc cutter and jointing compound are consumables in Other expenses; the laser level, disc cutter and whacker plate are equipment, with the excavator in Repairs and maintenance.
Cards, cover and the office in the cab
Renewing your CPCS or NPORS card for the machines you already operate, and the CSCS card and health and safety test that go with it, is allowable, entered as Other expenses. Public liability, plant insurance on the excavator, which most finance agreements insist on, and hired-in plant cover are Insurance. Boots, hi-vis, gloves, ear defenders and a hard hat are Other expenses. The part of the phone bill that is for work, the accountant's fee and a listing that brings in drive and drainage enquiries, recorded as Advertising costs, all count too.
The rules behind every claim: allowable expenses for sole traders.
The van, the low-loader and a changing run of sites
The van is claimed by one of two methods, and whichever you pick stays with that van for as long as the business runs it. HMRC's flat mileage rates, 55p a mile for the first 10,000 business miles in the tax year and 25p after that, roll the van's fuel, wear, insurance and servicing into one figure per mile. The other is the business proportion of what the van really costs, recorded as Motor and fuel. A van paid for outright can, on the cash basis, be deducted in the year of payment, less a share for any private use, but a van claimed that way stays on real costs for good and never moves to the flat rate; the purchase of a car is never deducted in one go at all.
Groundwork moves around: footings on one developer's plot for six weeks, a drainage run across town, a driveway for a homeowner, then a new site altogether. The drive from home to each of them is business travel because home is the base the trade is run from, and so is the trip to the yard to collect the dumper and the run to the tip. The exception is the one site that lasts. Spend most of a year on the same housing development and that site can be treated as where the business is carried on, with the daily drive to it counted as ordinary commuting rather than business travel.
The excavator does not travel on the mileage rate. Moving it on a hired low-loader is a haulage charge in Other expenses, and towing it on your own plant trailer behind the van adds nothing beyond the van's miles. Log each van trip in FileThat with its date, where it went and how far, and the deduction comes out at the flat rates; a van on actual costs is given a business-use percentage instead, and the private part is left out of the filing.
Which journeys qualify, and the van and car rule spelled out: can I claim mileage.
CIS and VAT
Groundwork is construction from site clearance to the slab
HMRC's manual lists site clearance, including demolition and tree felling, earthmoving on site, excavation, laying foundations and the provision of roadways and other access works as construction operations, and installing the drainage to a building is one as well. So when a developer, a main contractor or a builder pays you for footings, drainage, a slab or a road, they take 20% off your labour, or 30% if you are not registered, and never off materials. Your turnover is the gross figure before the deduction, and the figures from each monthly statement are entered in FileThat so the tax the contractor has paid for you comes off your bill. A homeowner having a drive or a soakaway put in is never a contractor, so that work is paid in full.
Arriving with your own digger changes the deduction
The deduction is worked out on the payment after the materials you bought, the plant you hired from a hire company and the fuel the plant burned come off, provided they are shown on your invoice and you can produce the receipts. Plant you own gets nothing: HMRC's guide says no notional deduction for plant hire may be made where the subcontractor owns the plant, so a day rate that is really half machine and half operator is deducted on in full, though the diesel the machine used can still be treated as materials. A machine on hire purchase counts as yours for this purpose. The money comes back when you file, which is why a year with an excavator bought in it so often ends in a refund.
Plant with an operator is CIS; haulage and bare hire are not
Supplying your excavator with you in the seat is hire of plant with an operator, which HMRC treats as subject to CIS, so the contractor deducts from the labour. The same line runs the other way when you are the one paying. A dumper hired without a driver, delivery of materials including ready-mix, and transport of spoil from site are not construction operations, so a grab lorry carting muck away and a hire yard dropping off a roller are paid in full with nothing deducted. Pay a self-employed labourer or banksman and you are a contractor for that payment: the deduction you take is their tax, sent on for them, and the gross amount is your expense in Construction industry - payments to subcontractors.
Drain repairs, the £3 million rule and VAT
Repairing or extending an existing drainage system on its own is outside the scheme, like any other system repair, and comes back in only as part of a mixed contract of works that includes making good to the building. A business outside construction, a farm or a haulage firm having a yard laid say, becomes a contractor only once it has spent more than £3 million on construction in any 12 months. If you are VAT registered and work for a VAT-registered contractor under CIS, the domestic reverse charge usually applies and the sale is recorded as Construction industry - reverse charge sales. Turnover for the VAT threshold includes the plant hire and materials you charge on, not just your labour.
See what you could get back: the CIS refund calculator.
A groundworker's year with an excavator bought in it
Take a groundworker in England who, through 2026-27, works mostly for one regional developer, following its sites across the county, digging footings, laying drainage and bringing the oversite up to level, with the developer supplying the materials. In July 2026 they buy a used three-tonne excavator for £21,000, paid outright, and hire a dumper and a roller in as each plot needs them. Invoices to the developer come to £52,000 for the year, of which £5,000 is set out as materials with the receipts behind it, the £3,000 of hired plant and £2,000 of diesel burned on the developer's sites by that plant and the excavator, so the developer deducts 20% of £47,000, £9,400, and pays over £42,600. Driveways, soakaways and drain repairs for homeowners bring in another £14,000 received in full, £5,000 of it materials charged on. Turnover is £66,000.
Costs: the £21,000 excavator; £900 of buckets and a quick hitch; £800 of tracks, filters and a service; £2,200 of plant diesel; £3,000 of dumper and roller hire; £1,600 of low-loader moves; £1,800 of grab lorries and tip charges on the homeowner jobs; £5,000 of drainage, aggregate and concrete charged on; £500 of hand tools and a laser level; £1,100 of public liability and plant insurance; 9,000 miles in the van between sites, the yard and the tip at the flat rate (£4,950); £80 of CPCS and CSCS renewals; £200 of boots, hi-vis and gloves; £240 of the phone; and £300 for the accountant. That is £43,670, leaving a profit of £22,330.
Taking the £12,570 Personal Allowance off leaves £9,760 taxable. Income Tax at 20% is £1,952, and Class 4 National Insurance at 6% of the same £9,760 is £585.60, so the year's tax is £2,537.60. The developer has already handed HMRC £9,400, so £6,862.40 comes back once the return is in, and with nothing left to pay there are no payments on account. Without the excavator in the figures the profit would have been £43,330, the tax £7,997.60 and the refund £1,402.40: the machine took £5,460 off the bill in the year it was bought.
Two variations. Had the machine been a £45,000 midi excavator, costs would have been £67,670 against £66,000 received, a loss of £1,670: the whole £9,400 comes back, and the loss can be set against other income of the same year, a spell on the payroll before going self-employed say, or carried forward against the next year's profit. Had the £21,000 been paid on hire purchase with a £4,000 deposit and £600 a month from August, only the £8,800 paid by 5 April is deducted this year, with each later instalment deducted in the year it is paid, so the profit would be £34,530 and the refund £3,690.40. Making Tax Digital reads turnover from an earlier year's return, and £66,000 is above the threshold, so a year like this brings the groundworker in from a later April. Scottish Income Tax bands differ, so a Scottish taxpayer's figures move a little.
What you cannot claim
Jeans and a jumper in the cab
Boots, hi-vis, gloves and a hard hat protect you and are allowable. The jeans, hoodie and trainers underneath are ordinary clothes and stay private, whatever a wet trench does to them.
The burger van outside a local footing
A bacon roll from the van parked outside a site near home is what you would have eaten anyway. Food becomes a cost of the business only when the work takes you away overnight or well outside your normal pattern.
Your own patio and a mate's soakaway
Digging out your own garden with the excavator, or a soakaway for a friend at no charge, burns diesel and uses aggregate that are private however they were paid for. Put them through as disallowable so they never reach the profit.
Fines, interest and the money you draw
A penalty notice on the van outside a site, a fine for running plant on red diesel, interest on tax paid late, what you take out for yourself and the Income Tax and Class 4 on the profit never reduce it.
The rules behind these four: site gear and the clothes under it, meals near and far from home and van journeys, parking and penalties.
Straight answers
Can I claim the digger I bought this year?
Yes. An excavator is plant, and the cash basis, the default for sole traders, lets you deduct what you paid for plant in the tax year you pay it, with no ceiling on the price; only cars are kept out. A share comes off for any private use. The deduction is for money that left the business, so a machine on hire purchase is deducted instalment by instalment and one you lease without ever owning is hire. If the deduction is bigger than the profit, the loss is relieved against other income or carried forward, not wasted. Under traditional accounting the same cost goes through capital allowances instead.
Do contractors deduct CIS on my plant?
On the whole payment, when the plant is yours. The contractor may leave out only what you actually paid to someone else and showed on the invoice: materials, plant hired from a hire company, and the fuel the plant used. Because you own the excavator there is no hire invoice, so HMRC's guide allows no notional deduction for it, and the day rate for machine and driver together is treated as labour. The diesel the machine burned on their job can be listed as materials and taken out before the 20%, so itemise the fuel on every invoice and keep the receipts behind it.
Is muck-away under CIS?
Not on its own. HMRC's manual says the transport of spoil from site and the delivery of materials, ready-mix included, are not construction operations, so a grab lorry or tipper firm you pay to take muck away is paid in full, and so is a haulier moving material between sites on the public highway. Shifting spoil around within the site is an integral operation inside the scheme, so a self-employed driver you pay to run a dumper across a development is a subcontractor. And a contract that mixes construction work with carting the muck away is within the scheme as a whole.
Can I claim diesel for the excavator as well as the van?
Yes, both, in separate boxes. The van is either on the flat mileage rate or on actual running costs in Motor and fuel, and plant diesel belongs to neither: it is a running cost of the machine, recorded as Other expenses, however you claim the van. Since 1 April 2022 that diesel has to be full-duty white fuel for construction work, so there is no rebate to account for, just the receipts to keep. Hydraulic oil, grease and the fuel for the whacker plate and disc cutter go in the same box.
What about the low-loader and moving the machine between sites?
Hiring a low-loader or beavertail to move your excavator is a haulage charge, allowable in full and recorded as Other expenses. A plant trailer you buy to tow a smaller machine is equipment in Repairs and maintenance. There is no CIS on either, because transport on the public highway is not a construction operation. Towing the machine behind your own van adds nothing beyond the van's business miles, which are already covered by whichever method you use for the van.
Is a drainage repair for a landlord CIS?
Usually not. Repairs and small extensions to an existing drainage system are outside the scheme on their own, and a landlord or letting agent is only a contractor once its construction spending passes £3 million in any 12 months, so a collapsed drain relined or a new gully for a landlord is paid in full. The deduction returns when the drainage is part of a wider contract that also makes good the building, or when a developer or builder pays you to install the drainage on a new build.
Do self-employed groundworkers have to use Making Tax Digital?
Yes, once your qualifying income passes the threshold. It has been £50,000 since 6 April 2026, and falls to £30,000 from April 2027 and £20,000 from April 2028. Qualifying income is turnover before anything comes off, so it includes the gross amount a developer paid before CIS, the hire and plant diesel you charged on and the aggregate and concrete you billed to homeowners, none of which is profit. HMRC decides from a return already filed, so a year over the line brings you in from a later April rather than at once.
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