CIS tax refund: how subcontractors claim back deductions (UK)
How deductions count against your bill, why a refund is common, a worked example, and what to keep before you file.
The short version. CIS deductions are advance payments towards your tax. On your Self Assessment return you report your pay before deductions and the deductions taken, and HMRC takes them off what you owe. If you have paid more than your bill, HMRC pays the rest back.
How deductions count against your bill
gov.uk describes the deductions your contractor takes under the Construction Industry Scheme as advance payments towards your tax. Sole traders and partners claim them through Self Assessment: you report your total pay before deductions as income, and the deductions as CIS deductions. HMRC works out how much tax you owe and takes off the deductions your contractors took. If a refund is due, HMRC pays it back.
Why many subcontractors get a refund
The deduction is a flat share of your labour: 20% if you are registered, 30% if not, taken from the invoice before VAT and materials. Your tax is different. It is worked out on your profit, which is what is left after your business costs, and then the first £12,570 is covered by the personal allowance. So the deduction is often more than the tax you owe.
Here is an example with round numbers, for 2026/27. Assume you are registered, all your income is CIS labour, you have no other income, and you pay rest-of-UK rates with no student loan.
| Labour invoiced across the year | £40,000.00 |
| CIS deducted by contractors (20% of £40,000) | £8,000.00 |
| Business costs (van, tools, insurance and so on) | − £10,000.00 |
| Profit | £30,000.00 |
| Income tax: (£30,000 − £12,570) x 20% = £17,430 x 20% | £3,486.00 |
| Class 4 National Insurance: £17,430 x 6% | £1,045.80 |
| Tax and National Insurance owed | £4,531.80 |
| Less CIS already deducted | − £8,000.00 |
| Refund due | £3,468.20 |
For 2026/27 the personal allowance is £12,570 and the basic rate of 20% runs up to £50,270 of total income. Class 4 is 6% on profits between £12,570 and £50,270. Class 2 is not compulsory, and profits above the small profits threshold of £7,105 count as paid.
If your profit were higher, there would be less refund, or a bill to pay if the tax came to more than the deductions. The self employed tax calculator works out your own figure, and the CIS deduction calculator shows what each invoice will have deducted.
What you need
- Your monthly statements. If a contractor makes deductions, they must give you a payment and deduction statement within 14 days of the end of each tax month. A tax month runs from the 6th to the 5th. gov.uk says to keep them.
- Your income and cost records, so you can work out your profit.
- A running total of deductions, checked against the statements before you file.
Deadlines
The online Self Assessment return is due by 31 January after the tax year ends. For 2025/26 that is 31 January 2027. If you still owe tax after deductions, you pay it by the same date. If you are due a refund, you get it by filing the return, so there is no reason to wait.
Limited companies are different
A limited company claims through its payroll scheme, not Self Assessment. See gov.uk's page on paying tax and claiming back deductions. That page also covers sole traders and partners who stop trading.
Keep every statement and deduction on one sheet
The CIS Subcontractor Record Book costs £12 as a one-off download. You log each payment and deduction from each contractor, and it adds up what to claim back.
Get the CIS record book, £12Questions people ask
Why do I get a CIS refund?
The contractor deducts 20% (or 30%) of your labour, but your tax is worked out on your profit after expenses and after the personal allowance. When the tax on that profit is less than the deductions, HMRC pays back the difference. In a round-number example, £8,000 deducted against a £4,531.80 bill leaves a £3,468.20 refund.
How do I claim back CIS deductions?
If you are a sole trader or partner, you do it on your Self Assessment return. You report your total pay before deductions as income and the deductions as CIS deductions. HMRC works out the tax you owe, takes off the deductions, and pays back any refund due.
What do I need to claim?
Your monthly payment and deduction statements. gov.uk says to keep them. A contractor who makes deductions must give you one within 14 days of the end of each tax month, which runs from the 6th to the 5th.
When is the deadline?
The online Self Assessment return is due by 31 January after the tax year ends. For 2025/26 that is 31 January 2027. Any tax still owed is due by the same date.
General information, not tax advice. The example is for illustration with round numbers. Your own refund depends on your profit, other income and tax code.
Checked against gov.uk on 8 November 2026. Sources: gov.uk, CIS for contractors (making deductions) and for subcontractors (pay tax and claim back deductions); gov.uk income tax rates and National Insurance rates for the self-employed.