Bookkeeping Basics for Builders: 5 Mistakes That Cost You Money

If you’re a self-employed builder, you’re probably no stranger to long days, tight deadlines, and chasing up payments. But when it comes to bookkeeping, it’s easy for the paperwork to pile up—and cost you money without you even realising it.

In this post, we’re breaking down 5 common bookkeeping mistakes builders make—and how to avoid them, so you can protect your profits, stay HMRC-compliant, and grow your business with confidence.

❌ Mistake 1: Mixing Business and Personal Expenses

Why it’s a problem:

Using one bank account for both business and personal spending makes it hard to track your income and claim allowable expenses. It also raises red flags with HMRC.

Solution:
✅ Open a separate business bank account and use it only for materials, fuel, tools, subcontractor payments, and other work-related costs. This makes bookkeeping cleaner—and tax returns easier.

❌ Mistake 2: Not Keeping Digital Records (Especially with MTD Coming)

Why it’s a problem:
With Making Tax Digital for Income Tax (MTD ITSA) starting in 2026 for those

earning over £50,000, you’ll be required to submit quarterly digital tax returns and use compatible software.

Waiting until the last minute to go digital can lead to fines, confusion, or expensive mistakes.

Solution:
✅ Start using MTD-compliant software like QuickBooks, Xero or FreeAgent now, so you’re ready well before the deadline. It’ll save you hours and improve accuracy.

❌ Mistake 3: Ignoring the Construction Industry Scheme (CIS)

Why it’s a problem:
If you’re a subcontractor and not tracking CIS deductions correctly, you could be missing out on tax refunds. If you’re a contractor and not submitting CIS returns, you risk penalties.

Solution:
✅ Work with a bookkeeper who understands CIS rules. They’ll ensure your payments, deductions, and monthly returns are properly managed—so you don’t pay more tax than necessary.

❌ Mistake 4: Losing Receipts and Missing Out on Tax-Deductible Expenses

Why it’s a problem:
Every time you forget to log a purchase (like tools, fuel, work boots, or parking fees), you’re paying more tax than you should. Over a year, that adds up to thousands.

Solution:
✅ Use your accounting app to snap and save receipts on the go. Most software will even auto-match it to your bank transaction—no paperwork, no stress.

❌ Mistake 5: Only Looking at Your Numbers Once a Year

Why it’s a problem:
If you’re only reviewing your income and expenses when it’s time to submit your Self Assessment, you’re running blind. You could be:

Underselling your services

Missing signs of cash flow problems

Overspending on materials or subcontractors

Solution:
✅ Review your books monthly. Better yet, get a bookkeeping firm to keep everything updated in real time so you always know where your money’s going.

🛠️ Your Bookkeeping Doesn’t Have to Be a Headache

At Simply Balanced Solutions, we help builders, electricians, plumbers and other tradespeople:

Go digital

Stay on top of CIS

Track expenses properly

Submit returns on time

Get ready for MTD

We speak your language—no jargon, no judgment.

📞 Book Your Free 15-Minute Call

Need help with bookkeeping, software setup or MTD compliance?
👉 Contact us now for a free consultation

Your tools earn you money. Your books help you keep it.
Avoiding these 5 mistakes can mean the difference between a stressful tax bill—and a healthy, profitable trade business.

Ready to get it sorted? We’re here to help.