How to claim your CIS tax refund from HMRC

Why most CIS subcontractors overpay tax

The Construction Industry Scheme works as a tax-advance system. Every time a contractor pays you, they deduct either 20% (if you are registered) or 30% (if you are not registered) and send that money directly to HMRC before you receive the rest. Crucially, that deduction is taken on the labour element of your invoice only. The cost of materials you supply is excluded from the deduction base entirely. So if your invoice is £1,200 made up of £800 labour and £400 materials, the 20% deduction applies to £800, giving a £160 deduction. Not to the full £1,200.

Even with the labour-only rule, overpayment is the norm rather than the exception. The deductions are taken in the moment, before any of the following are accounted for:

• Your personal allowance (£12,570 in 2026/27, on which no income tax is due)
• Your allowable business expenses (tools, vehicle costs, protective clothing, phone bills, accountancy fees)
• Class 4 National Insurance, which is only charged on profits above a threshold
• Any trading losses or earlier-year reliefs

The effect is systematic over-deduction. You end up paying tax in advance at 20% on every labour invoice, month after month, regardless of what your actual taxable profit turns out to be. Industry data suggests the typical CIS subcontractor annual refund is around £2,000, though this is a market average and not a guaranteed figure for any individual. For subcontractors who carried the 30% rate (because they were not registered when some contractors paid them) or who have significant allowable expenses, the overpayment is often higher.

For an overview of how the deduction system works and what rates apply, see our guide to CIS deduction rates explained.

The sole trader route: Self Assessment step by step

If you operate as a sole trader, you reclaim CIS overpayments through your annual Self Assessment tax return. There is no mechanism to claim back in real time. The process runs as follows.

Step 1. Register for Self Assessment (if you have not already)

You must be registered for Self Assessment to file a tax return. If you have never filed before, register with HMRC online using your Government Gateway account. HMRC will issue you a Unique Taxpayer Reference (UTR). Allow up to 10 working days for the UTR to arrive. You must also be registered for CIS as a subcontractor: an unregistered subcontractor suffers the 30% rate, and registration (free, done online or by phone) immediately reduces future deductions to 20%.

Step 2. Collect your CIS deduction statements

Every contractor who has paid you during the tax year is legally required to give you a CIS payment and deduction statement each time a deduction is made. These statements show the gross payment, the amount deducted, and the contractor's own CIS details. You need all of them before you can file accurately. Missing or incorrect statements are by far the most common cause of refund delays. If a contractor has not provided one, request it in writing. HMRC's Government Gateway also lets you view the deductions your contractors have reported against your UTR, which is a useful cross-check.

Step 3. File your Self Assessment return after 5 April

The tax year ends on 5 April. You can file your return online from 6 April onwards, and doing so early is strongly advisable. The online filing deadline is 31 January the following year (so the 2025/26 return is due by 31 January 2027), but HMRC processes refunds as returns come in. Filing in April or May rather than January means your refund arrives months earlier.

On the return you will:

• Declare your total gross income from all construction work (the figure before the CIS deduction, not the amount you actually received)
• Claim your allowable business expenses in the self-employment section
• Enter the total CIS deductions suffered in the dedicated CIS box (SA100, supplementary page SA103F, box 81)
• Report any other income sources (employment, rental income, savings interest) that affect your overall tax position

HMRC's system then calculates your actual tax liability on the profit figure, credits the CIS deductions already paid, and produces either an amount still owed or a repayment due.

Step 4. Receive the repayment

Where a repayment is due, HMRC will pay it to the bank account linked to your Government Gateway account. If no bank details are held, HMRC will issue a cheque. HMRC aims to process online repayments within 5 to 10 working days of the return being submitted. Returns selected for a compliance check can take considerably longer, which is one reason accuracy matters from the outset.

Stage	Action	Timing
Tax year ends	Begin collecting CIS statements from all contractors	From 6 April
Register UTR (if needed)	Apply via Government Gateway	Allow 10 working days
File online return	Log in to Self Assessment, complete SA103F, enter CIS box	From 6 April; deadline 31 January
HMRC processes return	Automatic calculation; repayment triggered if overpaid	5 to 10 working days after filing
Repayment received	Bank transfer to account on Government Gateway	Shortly after processing

The limited company route: EPS reclaim in real time

If you operate through a limited company, you have a significantly faster route than waiting for a year-end Self Assessment refund. A limited company that suffers CIS deductions can offset them in real time against its monthly PAYE and employer National Insurance liability via the Employer Payment Summary (EPS).

Each month, when you submit your Full Payment Submission (FPS) to HMRC covering your payroll, you also submit an EPS. The EPS includes a field for CIS deductions suffered during the month. HMRC reduces the amount of PAYE/NIC you owe by the amount of CIS deducted from your company. In a good month, the CIS deductions can eliminate your PAYE liability entirely. If your CIS deductions exceed your PAYE/NIC liability in a given month, the excess carries forward or can be claimed as a direct repayment from HMRC's CIS office.

This route only works if the company runs a payroll (so that there is a PAYE liability to offset against). The company must also have registered both as a CIS subcontractor and as an employer. For a detailed walkthrough of the EPS process and the company-specific rules, see our guide to CIS limited company reclaim.

The key practical difference between the two routes is timing. A sole trader may wait up to 18 months between a deduction being made and a refund arriving (if the deduction is made early in one tax year and the Self Assessment return is filed close to the January deadline in the next). A limited company using EPS correctly can recover that same deduction within weeks of it being made.

Records you need to support your claim

Whether you are a sole trader filing Self Assessment or a limited company using EPS, the following records underpin an accurate and defensible refund claim:

• CIS payment and deduction statements from every contractor who paid you. Each statement must show the contractor's name, their Unique Taxpayer Reference or Companies Registration Number, the gross amount paid, the amount deducted, and the date of payment.
• Sales invoices for every job (showing labour and materials split clearly, since deductions only apply to labour)
• Purchase receipts and expense records for tools, vehicle costs, materials, protective clothing and other allowable items
• Bank statements showing payments received, to cross-reference against contractor statements
• Mileage log if you are claiming vehicle expenses at the approved mileage rate (55p per mile for the first 10,000 business miles from 6 April 2026, then 25p)

HMRC expects you to keep these records for at least five years from the Self Assessment filing deadline for the relevant tax year. For a full breakdown of what construction expenses are claimable, see our guide to allowable expenses for CIS subcontractors.

Common errors that delay refunds

HMRC's CIS repayment process is largely automated, but certain errors consistently trigger manual checks or outright rejections. These are the ones worth knowing before you file.

Entering net income instead of gross

The Self Assessment return asks for your gross income, which is the total your contractors paid you before the CIS deduction. Many subcontractors enter the amount they actually received in their bank account, which is the net figure after deduction. This understates income and throws off the calculation entirely. Always use the gross figure from your CIS deduction statements.

Missing contractor statements

If you cannot account for every deduction that HMRC has on record against your UTR, the system flags a mismatch. HMRC's records come from the CIS300 returns your contractors file each month. If their reported deduction does not match what you claim on your return, HMRC will query it. Gather all statements before filing, and cross-check against your Government Gateway record.

Incorrect CIS box figure

On the SA103F, box 81 is specifically for CIS deductions suffered. It is not the same as tax paid (which goes elsewhere on the return). Putting the deduction figure in the wrong box, or duplicating it, produces an incorrect tax calculation and will generate a manual review.

Not registering for CIS before filing

If you were paid at the 30% rate because you were not registered, HMRC has those 30% deductions on record. Filing a Self Assessment return without being registered for CIS can cause a mismatch between what you claim and what the contractor reported. Register first, then file.

Omitting other income sources

Self Assessment requires you to declare all income, not just construction work. Employment income from a PAYE job, rental income, or significant savings interest all affect your overall tax liability and the size of any repayment. Omitting a source is the most common trigger for an HMRC compliance check, which suspends the repayment while the check runs.

Claiming materials deducted by the contractor

CIS deductions only ever apply to the labour element of your invoice. If your contractor correctly excluded materials from the deduction base, those materials did not generate a CIS deduction and therefore cannot increase your CIS repayment claim. Only claim what was actually deducted.

When to use a specialist accountant

For some subcontractors, particularly those with a single straightforward source of income and a small number of contractors to reconcile, Self Assessment is manageable without help. For the majority, the combination of CIS deduction reconciliation, allowable expenses, and the interaction with other income sources makes errors likely and the cost of those errors meaningful.

The most useful moment to involve a specialist CIS accountant is before you file your first return, not after. Getting the first return right establishes the baseline. Common situations where specialist input makes a clear practical difference include:

• You worked for multiple contractors across the year and deduction statements are missing or inconsistent
• You were paid at both 20% and 30% rates at different points in the year (common if registration lapsed or was not in place at the start)
• You have significant business expenses and are unsure which are allowable
• You have other income sources that interact with the CIS refund calculation
• You have not filed a Self Assessment return before
• You are considering moving to a limited company structure, where the EPS route becomes available

For an overview of how the CIS scheme operates and what your obligations are as a registered subcontractor, see our guide to what CIS is and how it works.

For a quick estimate before you start, try our CIS refund estimator. Enter your income, deductions and expenses and it gives you a working figure for what HMRC may owe you this year.

If you would like us to handle your CIS refund claim from start to finish, our CIS tax refund service covers the full process: gathering your deduction statements, preparing and filing the return, and dealing with HMRC on your behalf until the money is in your account.