Tax Guide for Mobile Mechanics and Vehicle Technicians

The Accounted Business Team·19 March 2026·6 min read

Working on Vehicles for a Living? Here Is Your Tax Guide

Mobile mechanics and vehicle technicians enjoy the freedom of working independently — no workshop rent, no boss looking over your shoulder, and the ability to choose your own jobs. But with that independence comes the responsibility of managing your own tax.

Whether you repair cars on customers' driveways, service fleet vehicles on-site, or provide breakdown recovery, this guide covers the key expenses and tax rules for the 2025/26 tax year.

Registering as Self-Employed

If your self-employed income exceeds £1,000 in a tax year, you must register with HMRC as a sole trader. You will receive a UTR number and will need to file a Self Assessment return by 31 January following the end of the tax year.

Register as soon as you start trading. Late registration can result in penalties.

Van Costs: Your Mobile Workshop

Your van is not just transport — it is your workshop, your tool store, and your office. This makes it one of your most significant expenses.

Buying a Van

If you buy a van outright or on finance, claim capital allowances under the Annual Investment Allowance (AIA). The AIA lets you deduct the full purchase price in the year of acquisition, up to £1 million. This applies whether you pay cash, use hire purchase, or take out a van loan. For hire purchase, you claim the capital allowance on the full cash price upfront, and the interest on the finance is a separate deductible expense.

Running Costs

If you claim actual costs rather than mileage rates, the following are deductible: fuel, van insurance (commercial vehicle policy), road tax (Vehicle Excise Duty), MOT, servicing and repairs to the van itself, tyres, breakdown cover, and van signage and livery (these are advertising expenses and also deductible).

Mileage Rates

Alternatively, use HMRC's flat mileage rates: 45p per mile for the first 10,000 business miles, then 25p after that. This single rate covers all van running costs — fuel, insurance, depreciation, repairs, and road tax. You cannot claim these separately if you use the mileage method. For most full-time mobile mechanics, the actual cost method usually gives a larger deduction because of the heavy business use, but the mileage method is simpler.

Van Modifications

If you fit out your van with racking, shelving, a vice, a compressor, or lighting specifically for mobile mechanic work, these modifications are claimable. They may be treated as part of the van (capital allowances) or as separate equipment expenses.

Tools: Capital Allowances

Tools are the lifeblood of a mobile mechanic's business. How you claim depends on the cost.

Hand Tools

Spanners, socket sets, screwdrivers, pliers, torque wrenches, hammers, pry bars, and similar hand tools are typically claimed as revenue expenses in the year of purchase because they are relatively low-cost and consumable.

Power Tools and Diagnostic Equipment

More expensive items qualify for capital allowances under the AIA. This includes diagnostic scanners and code readers (OBD-II, manufacturer-specific), impact wrenches and air tools, portable jacks, axle stands, and ramps, battery chargers and jump packs, welding equipment, air compressors, and pressure washers.

Replacement Tools

When you replace a worn-out or broken tool, the replacement cost is a revenue expense, deductible in full.

Parts and Consumables

Parts and consumables purchased for specific jobs are direct costs and are fully deductible. This includes engine oil, filters, brake pads, discs, spark plugs, bulbs, belts, hoses, gaskets, and all other parts fitted to customers' vehicles. Consumables like cleaning rags, disposable gloves, degreaser, brake cleaner, penetrating oil, and cable ties are also deductible.

Parts Mark-Up

If you buy parts at trade price and charge the customer a mark-up, the mark-up is part of your taxable income. The trade price you paid is the deductible expense.

Insurance

Public Liability Insurance

Public liability insurance is essential for mobile mechanics. You are working on other people's property — their vehicles, their driveways — and if something goes wrong, you need cover. The premium is fully deductible.

Motor Trade Insurance

Some mobile mechanics carry motor trade insurance, which covers you to drive customers' vehicles (for example, to test-drive after a repair). This is deductible.

Professional Indemnity

If you provide advice or diagnostic services, professional indemnity insurance covers claims of incorrect diagnosis. The premium is deductible.

Goods in Transit Insurance

If you carry valuable parts in your van, goods in transit insurance covers theft or damage. This is deductible.

MOT Tester Fees

If you are a qualified MOT tester and maintain your annual training and assessment, the costs are deductible. This includes the MOT tester annual training and assessment fee, any additional CPD required by DVSA, and DVSA registration fees.

Note that mobile mechanics typically cannot conduct MOTs because a registered MOT testing station is required. However, if you also work part-time at a garage as an MOT tester, the associated costs are still claimable against your self-employment income (provided the income from that work is also declared).

Travel Between Jobs

No Fixed Workplace

As a mobile mechanic, you do not have a single permanent workplace. Every journey from your home to a customer's location, and between customer locations during the day, counts as business travel. This is a significant tax advantage.

Keeping Records

If you use mileage rates, record the date, start and end points, purpose, and distance for every journey. If you use actual costs, keep all fuel receipts and calculate the business-use percentage. A simple mileage app or notebook works.

CIS: The Construction Industry Scheme

When CIS Applies

If you do work for construction companies — for example, maintaining or repairing plant machinery, construction vehicles, or equipment on building sites — the Construction Industry Scheme may apply.

Under CIS, the contractor (the construction company) deducts 20% from your payment (or 30% if you are not registered for CIS) and pays it to HMRC on your behalf. This deduction counts towards your Income Tax and NI bill. When you file your Self Assessment return, the CIS deductions are credited against your tax liability.

Registering for CIS

If you regularly do work for construction companies, register as a CIS subcontractor with HMRC. This ensures the lower 20% deduction rate applies. Without registration, 30% is deducted.

Gross Payment Status

If you meet HMRC's criteria — typically a turnover of at least £30,000 per year (excluding materials and VAT), a good tax compliance record, and running a business through a bank account — you can apply for gross payment status. This means the contractor pays you in full without CIS deductions, and you pay your tax through Self Assessment as normal.

Record-Keeping for CIS

Keep all CIS payment and deduction statements from contractors. You need these to complete your Self Assessment return and claim credit for the tax already deducted.

Training and Qualifications

Courses that maintain or improve your existing mechanical skills are deductible. This includes manufacturer training courses, IMI (Institute of the Motor Industry) qualifications, electric and hybrid vehicle training, air conditioning certification (F-Gas), and diagnostic training courses.

IMI membership fees are also deductible.

National Insurance

Class 2 NI is £3.45 per week (if profits exceed £6,725). Class 4 NI is 6% on profits between £12,570 and £50,270, then 2% above that.

Record-Keeping

Keep all invoices issued to customers, parts receipts, tool purchase receipts, CIS deduction statements, insurance documents, van running cost records, mileage logs, and bank statements. HMRC requires records for at least five years after the filing deadline.

Fix Cars, Not Spreadsheets — Let Accounted Handle Your Books

Mobile mechanics deal with hundreds of small transactions — parts purchases, fuel stops, tool replacements, and customer invoices. Keeping track of it all on paper or in a spreadsheet is a headache. Accounted connects to your bank and automatically categorises everything — parts, fuel, insurance, CIS deductions, and more. Penny, your AI bookkeeper, sorts each transaction, tracks your CIS credits, and keeps your records MTD-ready year-round. Start your free trial with Accounted and let Penny handle the books while you get back under the bonnet.

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