How to Start a Trades Business in the UK (Plumber, Electrician, Builder)

Going Out on Your Own as a Tradesperson

If you've been working for someone else and you're ready to go it alone, you're not short of company. Hundreds of thousands of plumbers, electricians, builders, and carpenters across the UK run successful sole trader businesses. The demand is there, the earning potential is strong, and there's something deeply satisfying about being your own boss.

But the business side of trades work has some unique wrinkles — CIS deductions, van costs, tool expenses, cash jobs, and mileage across multiple sites per day. This guide covers all of it.

Qualifications and Certifications

The qualifications you need depend on your trade.

Plumbing

There's no legal requirement to hold a qualification to work as a plumber in the UK (surprising, we know). However, clients and contractors will expect an NVQ Level 2 or 3, or equivalent.

Gas Work

If you work with gas appliances, you must be Gas Safe registered. This is a legal requirement — working on gas without registration is a criminal offence. Registration involves an ACS assessment and costs around £300–£400 per year.

Electrical Work

Electricians should hold a Level 3 qualification and be registered with a competent person scheme like NICEIC, NAPIT, or ELECSA. This allows you to self-certify certain electrical work without involving building control. Without it, your customers need building control approval for notifiable work — making you less attractive to hire.

General Building

Builders don't need specific qualifications by law, but CSCS (Construction Skills Certification Scheme) cards are essential for most construction sites.

CIS Registration: If You Work for Contractors

The Construction Industry Scheme (CIS) applies if you do construction work for a contractor (rather than directly for homeowners).

Under CIS, the contractor deducts tax from your payments — 20% if you're registered, or 30% if you're not. These deductions count towards your year-end tax bill, so it's not additional tax — it's tax paid in advance.

Register for CIS immediately. The 30% unregistered rate is punishing. Registration is free through HMRC.

For a detailed breakdown, read our complete CIS subcontractors guide.

CIS and Materials

CIS deductions are only applied to the labour portion of your invoice. Materials are excluded. So on a £1,000 job — £700 labour and £300 materials — the 20% deduction applies to the £700 only. Always separate labour and materials on your invoices.

Tools and Van as Business Expenses

Tradespeople tend to have significant business expenses, which is good news for your tax bill. Here's what you can claim — and for the full list, see our sole trader expenses guide:

Tools and Equipment

• Hand tools, power tools, specialist equipment
• Safety equipment — PPE, hard hats, steel-toe boots, hi-vis
• Replacement and repair of tools
• Tool insurance

Items under £1,000 can usually be deducted in full in the year of purchase.

Your Van

Your van is probably your biggest single business expense. Two options:

1. Simplified mileage rate — 45p per mile for the first 10,000 business miles, then 25p. Simple, but you can't also claim fuel, insurance, or repairs.
2. Actual costs — the business-use percentage of fuel, insurance, road tax, MOT, servicing, repairs, and depreciation.

If your van is used exclusively for business, you can claim 100% of actual costs. Once you choose a method for a vehicle, you must stick with it.

Mileage Tracking for Multiple Jobs Per Day

Most tradespeople visit multiple sites daily. That's a lot of mileage — and a lot of tax relief you'll miss if you don't track it.

Every business journey needs: the date, start and end locations, distance driven, and purpose of the trip.

If you drive 80 miles a day across three or four jobs, that's roughly 20,000 miles a year — worth about £7,250 in mileage deductions at HMRC rates. That could reduce your tax bill by over £1,400. Not tracking it is literally throwing money away.

Insurance Requirements

Public Liability Insurance

Essential for any tradesperson. Most clients and all contractors will require proof — typically £1 million to £2 million minimum cover.

Professional Indemnity Insurance

Relevant if you provide advice or design work alongside practical trade work.

Employers' Liability Insurance

Legally required if you employ anyone, including casual labourers for bigger jobs.

Tools Insurance

Covers theft or damage to your tools in your van, on-site, or at home. Given replacement costs, it's well worth having.

Cash Jobs: HMRC Still Needs to Know

Let's address this directly. If a customer pays you cash, that income is still taxable. HMRC knows tradespeople frequently receive cash payments and actively investigates the sector. Failing to declare cash income is tax evasion — penalties include fines of up to 100% of the unpaid tax, plus interest.

The smart approach: record every job, every payment, regardless of how you're paid. Bank all cash promptly. It's not just about being legal — it also gives you an accurate picture of your business performance.

Our guide on tax deadlines for sole traders will keep you on the right side of HMRC, and our post on reducing your tax bill covers legitimate ways to lower what you owe.

How Accounted Handles CIS Deductions and Mileage

Accounted was built with tradespeople firmly in mind.

• CIS tracking built in. Record deductions as you receive payment statements. Accounted tracks gross payments, deductions, and amounts already paid towards your tax bill.
• WhatsApp mileage logging. Tell Penny "drove from Leeds to Bradford and back, plumbing job" and she logs the round-trip at the correct HMRC rate.
• Receipt scanning on the go. Buy materials at Screwfix? Snap the receipt and WhatsApp it. Penny categorises it and matches it to your bank transaction.
• Automatic bank sync. Every transaction appears automatically. Penny learns your patterns — fuel stops, merchants, tool suppliers.
• Real-time tax estimates. Always know what you owe, accounting for CIS deductions already made.
• MTD ready. When quarterly submissions become mandatory, you're covered.

You didn't get into the trades to do paperwork. Let us handle that bit.

Ready to simplify your bookkeeping? Try Accounted free for 14 days →

Related Reading

• Side Hustle Tax Guide: When Does HMRC Need to Know?
• Tax Guide for Window Cleaners: Expenses and Record Keeping

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