If you are asking how do I claim a CIS refund, you are not alone. Thousands of UK subcontractors overpay tax every year under the Construction Industry Scheme, also known as CIS. The good news is that you can usually claim that money back. You just need to follow the right steps.
In this guide, I will walk you through exactly how CIS refunds work, how to claim one, and how to avoid delays. I will keep it simple and practical so you can take action straight away.
What Is a CIS Refund?
Before we jump into the steps, let’s quickly clear up what a CIS refund actually is.
Under the Construction Industry Scheme, contractors deduct either 20% or 30% tax from your payments and send it straight to HMRC. These deductions count as advance payments towards your tax bill.
If too much tax has been deducted compared to what you actually owe, HMRC will owe you a refund.
This often happens if:
You have allowable business expenses
You did not work for the full tax year
You had gaps between contracts
You are registered for CIS but your total income was lower than expected
The key point is this. CIS deductions are not your final tax bill. They are just payments on account.
Step 1: Make Sure You Are Registered for CIS
This is a simple but important starting point.
If you are not registered as a subcontractor under CIS, contractors will deduct 30% instead of 20%. That means even more overpaid tax.
If you are self-employed in construction, you should:
You can do this online through your Government Gateway account.
Step 2: Complete a Self Assessment Tax Return
Here is the bit many people miss. You do not claim a CIS refund through a separate refund form. You claim it through your Self Assessment tax return.
At the end of the tax year, you must:
Declare all your income
Include the CIS tax deducted
HMRC then works out whether you have paid too much tax.
If you have, they issue a refund.
The tax year runs from 6 April to 5 April. Your tax return deadline is 31 January following the end of that tax year if you file online.
For example, for the tax year ending 5 April 2025, your deadline is 31 January 2026.
Step 3: Gather Your CIS Statements
Each month, your contractor should give you a CIS payment and deduction statement. This shows:
How much you were paid
How much tax was deducted
Their contractor details
You will need these figures for your tax return.
Make sure the total CIS deducted on your tax return matches the statements. If the numbers are wrong, your refund can be delayed.
Using cloud accounting software like Xero can make this much easier. You can record CIS income, track deductions, and keep your records tidy throughout the year. That way, when it is time to file your return, everything is ready to go.
Step 4: Claim All Allowable Expenses
This is where many subcontractors increase their CIS refund.
Your tax bill is based on profit, not turnover. That means you can deduct allowable business expenses, such as:
Tools and equipment
Protective clothing
Travel to temporary sites
Fuel and vehicle costs
Public liability insurance
Accountancy fees
Phone and internet used for work
The more legitimate expenses you claim, the lower your taxable profit.
Lower profit means lower tax. Lower tax means a bigger CIS refund if you have already paid too much through deductions.
Keep receipts and records. HMRC can ask to see evidence.
Step 5: Wait for HMRC to Process the Refund
Once your tax return is submitted, HMRC will calculate your position.
If you are due a refund, you can:
Have it paid directly into your bank account
Offset it against other tax you owe
Refunds are usually paid within a few weeks, but it can take longer during busy periods.
Make sure your bank details are correct in your tax return to avoid delays.
Can You Claim a CIS Refund During the Tax Year?
In most cases, you need to wait until the tax year has ended and submit your Self Assessment.
However, if you trade through a limited company, the process is different. CIS suffered is offset against PAYE and National Insurance through your payroll. If there is still a surplus, you may be able to apply for a refund during the year.
This area can get technical, so it is worth getting advice if you run a limited company.
Do CIS Refunds Change Under Making Tax Digital?
Short answer, no.
Making Tax Digital changes how you report your income, but it does not remove your right to claim a CIS refund.
If you are a sole trader, your CIS refund is still calculated after the end of the tax year. The new quarterly updates are just progress reports. HMRC only work out your final tax position once you submit your end of year figures.
So if you have overpaid tax under CIS, you can still claim it back in the normal way.
Common Reasons CIS Refunds Get Delayed
Let’s quickly cover a few common problems.
Refunds are often delayed because:
CIS figures do not match HMRC records
The tax return is incomplete
Bank details are missing or incorrect
HMRC opens a compliance check
Double check your numbers before submitting. Good bookkeeping throughout the year makes a huge difference.
How to Make Claiming a CIS Refund Easier
The simplest way to avoid stress is to stay organised all year round.
Using Xero allows you to:
Track income and CIS deductions monthly
Store receipts digitally
See your profit in real time
Share records easily with your accountant
When your books are up to date, your tax return becomes much more straightforward. And you are far less likely to miss out on a refund.
Don’t Leave Your CIS Refund Unclaimed
If you have been wondering how do I claim a CIS refund, the answer is simple. Submit an accurate Self Assessment tax return, include your CIS deductions, and claim all allowable expenses.
Many subcontractors are owed money and do not realise it. If you have had tax deducted under CIS, it is always worth checking your position.
Claiming your refund is not about bending the rules. It is about making sure you do not overpay tax.
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