How to Claim Back CIS Deductions

If you work as a CIS subcontractor, your contractors deduct tax from your payments throughout the year and send it to HMRC. But those deductions are advance payments — not your final tax bill. When you file your Self Assessment, you may find you've overpaid. Here's how to get that money back.

How CIS Deductions Work as Tax Credits

Every time a contractor pays you, they withhold either 20% (registered) or 30% (unregistered) of the labour portion and send it to HMRC on your behalf.

At the end of the tax year, HMRC adds up all those deductions and compares them to your actual tax and National Insurance bill. If the deductions exceed what you owe, the difference comes back to you as a refund.

Example:

Item	Amount
Total CIS income (2025/26)	£48,000
Allowable expenses	£6,000
Taxable profit	£42,000
Income Tax due	£5,886
Class 4 National Insurance due	£2,479
Total tax liability	£8,365
CIS deducted at 20%	£9,600
Refund due	£1,235

In this case, the subcontractor overpaid by £1,235 because CIS was calculated on gross income, while the actual tax bill accounts for expenses and allowances.

Claiming Back CIS as a Sole Trader or Partner

If you're a sole trader or in a partnership, you reclaim CIS through your Self Assessment tax return.

Step 1: Gather your CIS payment statements

Contractors provide a statement each time they pay you. Each statement shows the gross amount, materials deducted, CIS deduction, and net payment. You need all of these for the tax year.

Step 2: File your Self Assessment return

When completing your return:

1. Record the full invoice amounts as your income (the gross figures, not what you received)
2. Enter your allowable business expenses
3. In the CIS deductions section, enter the total amount deducted by all contractors during the year

Step 3: HMRC calculates your position

HMRC works out your tax and National Insurance, then subtracts the CIS already paid. Three outcomes are possible:

• Refund due — You overpaid. HMRC sends the difference back to you
• Nothing to pay — Deductions matched your liability exactly
• Balance to pay — Your tax bill exceeds what was deducted (less common at 20%)

Step 4: Receive your refund

If you're owed money, HMRC typically processes refunds within 4-6 weeks of receiving your return. The refund goes to the bank account linked to your Self Assessment.

Claiming Back CIS as a Limited Company

If you operate through a limited company, the process is different. You don't use Self Assessment — instead, CIS deductions offset against your PAYE liability.

How it works:

1. Submit your monthly Full Payment Submission (FPS) to HMRC as normal
2. File an Employer Payment Summary (EPS) showing the year-to-date CIS deductions
3. HMRC offsets those deductions against the PAYE tax and National Insurance you owe
4. Pay only the remaining balance

If deductions exceed your PAYE bill:

When CIS deductions are more than your PAYE liability for a month, carry the balance forward to the next period. Continue noting zero payment on your EPS.

At the end of the tax year, if there's still an unclaimed balance, HMRC refunds it. You also declare all income through your Corporation Tax return as normal.

What If You've Lost CIS Statements?

Without statements, you can't prove how much was deducted. Here's what to do:

Ask the contractor first. They're required to keep records and can issue replacement statements.

If the contractor has stopped trading, contact HMRC PT Operations with:

• Your name, address, and UTR
• The contractor's name and address
• Their tax reference (if you have it)
• Approximate payment dates
• Why you can't get the statement

HMRC can check their records and confirm the deductions made.

Common Reasons People Miss Out on CIS Refunds

Not filing Self Assessment

This is the biggest one. If you don't file a return, you can't reclaim overpaid CIS. There's no other route to get that money back.

Filing late

You can still claim, but you'll face late filing penalties (£100 initially, rising over time). The refund may be reduced by the penalty amount.

Forgetting to include CIS deductions

Some people file their return but don't enter the CIS figures. Double-check the CIS section before submitting.

Not claiming allowable expenses

The more legitimate expenses you claim, the lower your tax bill — and the larger your potential refund. Common CIS expenses include tools, travel to sites, protective clothing, and vehicle costs.

Key Deadlines

Deadline	What it means
5 April	End of the tax year — gather all statements
31 October	Paper Self Assessment deadline
31 January	Online Self Assessment deadline
31 January	Payment deadline for any tax owed

Filing earlier means getting your refund sooner. You don't have to wait until January.

How Much Could You Get Back?

The refund amount depends on your income, expenses, and personal allowances. Here are rough examples for the 2025/26 tax year:

Annual CIS income	Expenses claimed	CIS deducted (20%)	Approximate refund
£30,000	£4,000	£6,000	£2,500-£3,500
£45,000	£5,000	£9,000	£1,000-£2,000
£60,000	£8,000	£12,000	£500-£1,500

These are estimates. Your actual position depends on your full tax calculation, including any other income and personal circumstances.

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This guide is for informational purposes only and does not constitute tax, legal, or financial advice. Tax rules change frequently. Always verify current requirements on GOV.UK or consult a qualified accountant for your specific situation.

Official Sources

• Pay tax and claim back deductions - GOV.UK
• Self Assessment tax returns - GOV.UK
• Construction Industry Scheme (CIS) - GOV.UK