CIS Tax Refunds
By Mustafa Bilgic · Updated 24 August 2026
If you work as a subcontractor in the construction industry, your contractor deducts CIS tax from every payment before you receive it. That deduction is not your final tax liability -- it is a payment on account. Most subcontractors overpay and are owed a refund, which you claim through self-assessment. Our CIS tax calculator shows how much has been deducted so you can check the figures before filing.
CIS deductions are not your final tax bill. Most subcontractors are owed money back -- run the calculator to find out how much before you file.
Why Most Subcontractors Overpay
CIS deductions are calculated at a flat rate on the labour element of each payment, without accounting for your personal allowance, allowable expenses, or other income. The standard deduction rate assumes every pound you earn is taxable, which overstates the liability for almost every subcontractor. If you have business expenses -- tools, vehicle costs, materials you supply, insurance -- those reduce your taxable profit, and the tax already deducted will exceed what you actually owe.
Subcontractors who are not registered with HMRC for CIS face an even higher deduction rate. Registering is free and reduces the rate to the standard level. If you have been working unregistered and suffering the higher deduction, you can still reclaim the overpayment through your tax return, but register immediately to reduce future deductions.
Claiming Your Refund Through Self-Assessment
The refund comes through your annual self-assessment tax return. You report your total CIS income, deduct your allowable business expenses, and declare the total CIS tax deducted during the year. HMRC compares the tax owed on your net profit with the CIS already deducted. If more has been deducted than you owe, the difference is your refund.
You need your CIS payment and deduction statements from every contractor you worked for during the year. Each statement shows the gross payment, the deduction amount, and the contractor's reference. Keep these throughout the year -- chasing them months later causes delays. File as soon after 6 April as possible to get your refund quickly. HMRC processes digital returns faster than paper, and refunds typically arrive within 5 to 8 weeks of filing. Use our CIS tax calculator to estimate your refund before you file.
Gross Payment Status
Subcontractors who meet HMRC's criteria can apply for gross payment status, which means contractors pay you without any CIS deduction. You still owe tax on your profits, but you manage cash flow yourself rather than having it withheld at source. The requirements include a track record of filing tax returns on time, keeping up with tax payments, and meeting a minimum annual turnover threshold.
Gross payment status is reviewed annually. If you miss a filing deadline or fall behind on a tax payment, HMRC can revoke it and you revert to the standard deduction rate. Losing gross status mid-year creates an immediate cash-flow hit because contractors start withholding from your next invoice. If you rely on uninterrupted cash flow, treat filing deadlines as non-negotiable.
Common Mistakes That Delay Refunds
The most frequent problem is a mismatch between the CIS deductions you declare on your return and the deductions contractors have reported to HMRC. If the numbers do not match, HMRC holds the refund while it investigates. Prevent this by reconciling your records against each contractor's year-end statement before you file.
Claiming expenses you cannot evidence is the other major cause of delays and enquiries. HMRC expects receipts or digital records for every business expense. Travel between sites, tools and equipment, protective clothing, and subcontractor insurance are all allowable, but only with evidence. Round-number estimates invite questions. Keep digital copies of receipts throughout the year rather than scrambling at filing time. This page is general information, not professional tax advice.
Not tax advice -- speak to your accountant.
Frequently asked questions
How long does a CIS refund take?
HMRC typically processes digital self-assessment returns within 5 to 8 weeks. Paper returns take longer. Delays occur if your declared deductions do not match the contractor's records held by HMRC.
Can I claim a CIS refund without an accountant?
Yes. You can file your self-assessment tax return yourself through the HMRC online portal. An accountant can help maximise allowable expenses and reduce the risk of errors, but they are not legally required.
What expenses can I deduct as a CIS subcontractor?
Tools, work clothing and PPE, vehicle costs for travelling between sites, insurance, phone costs used for business, and accountancy fees are all commonly allowable. Each expense must be wholly and exclusively for business purposes.
Do I pay National Insurance as well as CIS tax?
Yes. CIS deductions only cover income tax. As a self-employed subcontractor, you also pay Class 2 and Class 4 National Insurance through your self-assessment return, calculated on your net profit.