CIS tax refunds for subcontractors

Under the Construction Industry Scheme (CIS), contractors take tax off your pay before you get it. If you are registered, they deduct 20% of the labour part of each payment. If you are not registered, they deduct 30%. These deductions are advance payments towards your tax and National Insurance for the year.

The deduction is worked out on your gross labour, with no allowance for your costs or your Personal Allowance. Your real tax bill is worked out on your profit, after expenses and after the first £12,570 of income. So the deductions are often more than you owe, and the difference comes back to you as a CIS tax refund.

Say you are a registered subcontractor with £40,000 of labour income in 2026/27. Contractors deduct 20%, so £8,000 has been taken off. Your expenses for tools, van, fuel and clothing come to £8,000, leaving a profit of £32,000. You have no other income.

Because the profit is over £7,105, Class 2 National Insurance is treated as paid, so you keep your State Pension credit without paying it. Every pound of expenses missed in this example would cost you 26p of refund, which is why we go through expenses properly.

• Missing statements. If a contractor’s statement is left out, the tax they deducted is not counted.
• Expenses left off. Tools, van costs, mileage, work clothing, phone and training all reduce your profit.
• Materials mixed with labour. Materials you paid for yourself are a cost, and should not have had tax deducted from them.
• Wrong deduction rate. If you are registered but were treated as unregistered, 30% may have been taken instead of 20%.
• Filing late. Waiting until January delays the money by months, and a late return adds a penalty.

We check each of these on every return. If your deductions look wrong, we raise it with the contractor or with HMRC before we file. Keeping receipts through the year, even as phone photos, makes the biggest difference.

1. 1

   Free 20-minute chat

   We find out who you have worked for, what records you have, and whether earlier years have been claimed.

2. 2

   Fixed price in writing

   You get the fee within one working day, so you know the cost before we start.

3. 3

   Gather and match statements

   We match each monthly CIS statement to HMRC’s records and ask contractors for any that are missing.

4. 4

   Claim every expense

   We go through your costs line by line so the profit, and the tax, is right.

5. 5

   File the return

   You approve the return and we file it with HMRC. The refund is paid after the return has been processed.

Our guide on how to claim a CIS tax refund explains each stage in more depth.

If you trade through a limited company, the refund works differently. The company sets CIS deductions against what it owes for PAYE and CIS each month, through the Employer Payment Summary. Anything left over after the tax year can be claimed back from HMRC as a repayment. We handle this as part of your payroll and CIS service.

CIS refunds are handled through your Self Assessment return, covered by our fixed monthly fee from £99 for self-employed people. There is no percentage taken from your refund. See our fees page.

• Every monthly CIS statement from every contractor for the tax year
• Your UTR and National Insurance number
• Receipts or bank statements for tools, materials you paid for, van, fuel, phone and clothing
• Details of any other income, such as a part-time job