How to claim a CIS refund as a subcontractor.

Why CIS subcontractors are often owed money

Under the Construction Industry Scheme (CIS), a contractor takes a deduction from each payment to you and sends it to HMRC. GOV.UK describes these deductions as advance payments towards your tax and National Insurance bill.

The deduction is a flat percentage of your labour. It does not take your business costs or your own tax position into account. Your real bill is only known once your income and allowable expenses for the whole year are added up. If the deductions taken came to more than that bill, the difference is due back to you.

How much is deducted in the first place

The rate a contractor uses depends on your status with HMRC:

• 20% if you are registered for CIS and the contractor can verify you
• 30% if you are not registered, or the contractor cannot verify you
• Nothing if you have gross payment status, in which case you pay your own tax later

Contractors should not take the deduction from every pound on your invoice. GOV.UK lists items that are left out, including VAT, materials you paid for directly, plant hired for the job, consumable stores and the cost of manufacturing or prefabricating materials.

So it pays to show materials clearly on each invoice and keep the receipts. If you cannot show what materials cost, the contractor will estimate the figure. A low estimate means a bigger deduction now and a bigger refund to wait for later.

The paperwork that proves your deductions

Each contractor you work for must give you a payment and deduction statement every month. It shows what they paid you and what they took off. They must give it to you within 14 days of the end of each tax month.

Before you claim, check that:

• You have a statement for every month you were paid by each contractor
• The gross figure on each statement matches what you invoiced
• Materials have been left out of the amount the deduction was worked out on
• The deductions add up to what you can see was held back from your bank receipts

If a statement is missing, ask the contractor for it. If the figures look wrong, raise it with them first. HMRC may ask for evidence of your deductions, so keep every statement.

Route one: sole traders and partners

If you are self-employed, you claim your CIS refund through your Self Assessment tax return. There is no separate CIS form for a normal year.

What goes on the return

On the return you enter your total pay before deductions as income. You then enter the total of all your CIS deductions in the CIS deductions box. You also claim your allowable business expenses, which reduce the profit you pay tax on.

HMRC works out your tax and National Insurance and takes off the CIS deductions already paid. If you still owe something, you pay it. If the deductions were more than the bill, HMRC owes you the difference.

Expenses make a real difference

Allowable expenses are the costs of running the business. GOV.UK gives examples such as fuel, parking and fares, uniforms, materials, insurance, bank charges, phone bills and training courses. If something is used partly for personal reasons, you can only claim the business share.

Every genuine expense you leave out makes your profit look higher than it was, and your refund smaller.

Key dates for Self Assessment

The tax year runs from 6 April to 5 April. Figures for the 2026/27 tax year cover deductions taken from 6 April 2026 to 5 April 2027, so you fill in that return after the tax year ends on 5 April 2027.

The return currently due is for 2025/26. GOV.UK gives these deadlines for it:

• Paper return: by 11:59pm on 31 October 2026
• Online return: by 11:59pm on 31 January 2027

If you have not filed a return before, you had to tell HMRC by 5 October 2026 that you need to file for 2025/26. Telling HMRC late may lead to a penalty, so do it as soon as you can.

You do not have to wait until January. GOV.UK says you fill in the return after the end of the tax year, so you can send it well before the deadline and have any refund worked out sooner.

A worked example

If you stop trading

If you stop working as a sole trader or partner, you may be able to claim back deductions from the current tax year without waiting for the year to end. GOV.UK points to form CIS40 for sole traders and form CIS41 for partners.

Route two: limited companies

A limited company subcontractor does not use a tax return to get CIS deductions back. Instead, the deductions are used against the company's payroll bill during the year.

Using deductions against your PAYE bill

Each time the company runs payroll, it sends its Full Payment Submission (FPS) as normal. At the same time it sends an Employer Payment Summary (EPS) showing the CIS deductions suffered so far in the tax year. HMRC takes that amount off what the company owes in PAYE, and the company pays any balance by the usual date.

If the deductions are bigger than the PAYE bill, the extra can be carried forward to later months in the same tax year. GOV.UK warns against using the Corporation Tax return to pay tax with CIS deductions, as this may lead to a penalty.

Keep a record of the deductions you have used against your PAYE bill. HMRC's form CIS132 can be used for this.

Claiming what is left at the end of the year

Any deductions still unused at the end of the tax year can be claimed back. You can claim once the tax year has ended on 5 April, and only after you have sent:

• All your FPS and EPS submissions for the year
• Any monthly CIS returns, if the company is also a contractor
• Your Company Tax returns

So for deductions taken in the 2026/27 tax year, the earliest a normal claim can be made is after 5 April 2027.

Making the claim

The claim is made online through HMRC's "Claim construction industry scheme deductions refund" service, signing in with the details linked to the company's Corporation Tax and PAYE accounts. The online service covers the past 6 tax years. Older years must be claimed by post.

You will need:

• The overpayment amount. Total CIS deductions minus the tax paid using them. HMRC accepts an estimate if you are not sure.
• Company details. Name, phone number, address, PAYE reference and Corporation Tax UTR.
• Bank details for the refund.
• Evidence such as payment and deduction statements and bank statements, if your figures do not match your contractors' records.

You can also ask for the money to be set against another tax, such as Corporation Tax or VAT, instead of being paid out.

HMRC says it will usually respond to a claim within 8 weeks. Before paying anything, it checks for other tax the company owes and uses the deductions to cover that first.

If HMRC questions or you need to change a claim

For a limited company claim, HMRC may ask for evidence of your deductions. GOV.UK says that if you do not reply by the date it gives, HMRC will change the claim using its own information, and you will not be able to make any more claims in that tax year. You can appeal its decision.

A company that made an online claim can correct it by sending the online form again with the right details. A postal claim is changed by letter, giving the new overpayment amount and details of the earlier claim.

A sole trader can correct a Self Assessment return within 12 months of the filing deadline. After that, a claim for overpayment relief must be made in writing, up to 4 years after the end of the tax year it relates to.

Common reasons refunds are smaller or slower

• Missing payment and deduction statements, so the deductions cannot be proved
• Materials not shown on invoices, so too much was deducted in the first place
• Expenses left off because receipts were lost
• Gross pay entered after deductions instead of before
• For companies, missing EPS submissions or a late Company Tax return holding up the claim
• Other tax owed, which HMRC takes from the refund first

Why tidy books make CIS refunds easier

A CIS refund is only as accurate as the records behind it. If each payment from a contractor is matched to its invoice and statement as it arrives, and each receipt is filed when it is spent, the year-end figures are already there.

That is what daily bookkeeping does. Bank lines are reconciled, receipts are matched, and missing statements and invoices are followed up while they are still easy to get.