CIS deductions are taken before any expenses or allowances are applied. Most registered subcontractors overpay across the year. We calculate the full refund, handle the claim and deal with HMRC on your behalf.
The route to your refund depends on your trading structure. Both routes recover every pound of overpayment.
Sole-trader subcontractors recover CIS deductions through the annual Self Assessment return, filed after the tax year ends on 5 April. The return sets the true tax liability against all income and allowable expenses. Where deductions have been higher than the liability, HMRC refunds the difference. We calculate, prepare and file the return on your behalf.
Limited company subcontractors do not have to wait until the year end. They can offset CIS deductions suffered against PAYE and CIS liabilities in real time each month via the Employer Payment Summary (EPS). This is significantly better for cash flow than the sole-trader route: no 18-month wait, no large lump-sum refund. We manage the monthly EPS submissions.
For a correctly filed sole-trader Self Assessment return, HMRC typically processes and issues the refund within 8 to 12 weeks. Complex cases or amended returns can take longer. For limited companies using the EPS route, deductions are offset month by month with no waiting period. We follow up with HMRC if delays occur.
The 20% CIS rate is applied to your labour payments at source, before any business expenses are considered. Mileage at 55p per mile (from 6 April 2026), tools, PPE, van costs, professional subscriptions: none of these are factored in when the deduction is taken. The Self Assessment return is where they are applied, which is why a refund usually results.
CIS deductions apply to the labour element only. Materials you supply for a job are excluded from the deduction base. Many main contractors apply the 20% to the full invoice value rather than splitting out materials. When that happens, you overpay on every single job. We review your deduction slips and recover any overpayment.
The personal allowance (£12,570 in 2026/27) means the first slice of your income is tax-free. CIS deductions ignore this: 20% is taken from day one regardless of your total income for the year. If your earnings are below the basic rate threshold after expenses, the effective refund rate is higher.
Unregistered subcontractors suffer 30% deductions instead of 20%. If your CIS registration has lapsed or your contractor cannot verify you, you may be on the higher rate unnecessarily. We check your registration status and resolve any verification issues with HMRC.
We keep the process as simple as possible. You do not need everything perfect before you contact us.
The rate that applies to you depends on your registration status. All three rates apply to the labour element only. Materials are excluded from the deduction base.
| Status | Deduction rate | How to get there |
|---|---|---|
| Gross Payment Status | 0% | Apply via HMRC. Pass business, turnover and compliance tests. |
| Registered subcontractor | 20% | Register for CIS with HMRC. Contractors verify status before paying. |
| Unregistered subcontractor | 30% | Higher rate applies when HMRC cannot verify registration. |
For information on applying for Gross Payment Status, see our GPS service page. All three rates are unchanged for 2026/27.
Book a free call. We will review your CIS deduction history and tell you exactly what refund to expect. No hard sell, no obligation.
We help subcontractors across all construction trades. See the trades we cover.