Yes. Materials used on jobs are deductible. Tools and a van used for business qualify for capital allowances, usually the Annual Investment Allowance, or the van can be claimed through HMRC's simplified mileage rates instead, but not both. If you also use the van privately, only the business share is allowable.
Materials
Materials bought and used on a job are a straightforward expense. Keep the supplier invoice and note which job it was for.
Tools
Small hand tools and consumables are day-to-day costs. Larger equipment that lasts, such as a specialist saw or a scaffold tower, is normally treated as a capital purchase and claimed through the Annual Investment Allowance. If you use the cash basis, which is the default for most sole traders, you deduct the cost when you pay it.
The van
There are two ways to claim, and you cannot mix them for the same vehicle:
- Actual costs plus capital allowances: the purchase price through the Annual Investment Allowance, plus fuel, insurance, repairs and road tax, each multiplied by the business-use percentage.
- Simplified mileage: a fixed rate for every business mile, covering running costs and the vehicle itself. You cannot use it for a vehicle you have already claimed capital allowances on.
You generally stay with the method you choose for the life of that vehicle, so it is worth modelling both before you start. Cars are treated differently from vans, and do not qualify for the Annual Investment Allowance.
Worked example
An electrician buys a used van for £14,000 in 2026/27 and uses it 80% for work. The capital allowance claim is £14,000 × 80% = £11,200. At 26% (20% income tax plus 6% Class 4 NIC), that is worth about £2,912 in tax. Fuel, insurance and repairs are claimed at 80% on top.
If he later sells the van for more than its tax value, the difference can create a balancing charge.
What to do
- Keep purchase invoices for the van, tools and materials.
- Keep a mileage log with dates, sites and business or private.
- Decide on the van method before you buy or before the first claim.
- Remember that home-to-permanent-workplace travel is not deductible.
Common mistakes
- Claiming both actual costs and mileage for the same van.
- Claiming 100% when the van is used privately.
- Treating a car like a van for allowances.
- Guessing at tool costs instead of keeping receipts.
Sources: GOV.UK: simplified vehicle expenses · GOV.UK: Annual Investment Allowance
Frequently asked questions
Speak to James Fitzpatrick — free consultation
Guessing at your van or tools costs rather than tracking them? Let's tighten that up before your next return.
Book a free consultation Call 07534 476727