How do I claim a CIS refund?

You claim back CIS deductions through your annual Self Assessment tax return. When you file, declare your income and expenses, calculate your actual tax liability, then offset the CIS deductions already paid to HMRC on your behalf. If the CIS deductions exceed your tax bill, HMRC refunds the difference - usually within a few weeks of filing.

Why would I get a CIS refund?

CIS deductions are taken from your gross labour payments without accounting for your allowable expenses. If you have significant expenses - materials, van costs, tools, insurance - your taxable profit is much lower than your gross income. The deduction is often higher than your actual tax liability, and the difference is your refund.

How long does a CIS refund take?

Once you file your Self Assessment return and HMRC processes it, CIS refunds are typically paid within 5-10 working days if you have a bank account set up for repayment in your HMRC account. Some refunds take up to 30 days if HMRC carries out further checks.

Can I claim a CIS refund if I am not registered for CIS?

Yes. If a contractor has deducted 30% from your payments because you were not registered, you can still reclaim the overpayment through Self Assessment. Registering as a CIS subcontractor with HMRC will reduce future deductions from 30% to 20% - saving you cash flow throughout the year.

Does CIS apply to materials?

No. CIS deductions only apply to the labour element of your invoice. If your invoice shows £2,000 labour and £500 materials, the 20% deduction only applies to the £2,000 labour element. The £500 materials is paid in full. Always split your invoices between labour and materials when working under CIS.

What is gross payment status under CIS?

Gross payment status means you receive your full invoice amount with no CIS deductions. To qualify, you need at least 12 months trading history, a clean tax compliance record, and construction turnover of at least £30,000 per year as a sole trader. Apply through your HMRC online account.

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CIS refund calculator - how much can you claim back?

Contractors deduct 20% from your labour payments and send it to HMRC. Most CIS subcontractors get some of it back at year end. See how much.

Total CIS turnover this year (£)

All gross income from CIS-registered contractors before deductions

Materials in your invoices (£)

Materials are not subject to CIS - this separates the labour element

Total allowable expenses (£)

All business costs: materials, van, tools, phone, insurance, subcontractors

Your CIS deduction rate

Breakdown

Labour element (subject to CIS)£25,000.00

CIS already deducted (20% of labour)£5,000.00

Taxable profit (after expenses)£18,000.00

Estimated income tax£1,086.00

Class 4 NI£325.80

Total estimated tax£1,411.80

Estimated CIS refund

£3,588.20

CIS deducted during the year exceeds your estimated tax liability. Claim the refund via Self Assessment.

Estimate only. Based on 2026/27 rates (Personal Allowance £12,570, basic rate 20%, Class 4 NI 6%). Does not account for income from other sources, pension contributions, Gift Aid, or other reliefs. Always confirm with HMRC or an accountant.

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How it works

Why most CIS subcontractors get a refund.

CIS deductions are taken on your gross labour payments without accounting for your expenses. Your actual tax is on profit - after costs. The gap between what was deducted and what you actually owe is the refund.

1

CIS is an advance payment

The 20% deduction is not a final tax bill. It is paid on account against your annual liability. You settle the actual amount when you file Self Assessment.

2

Expenses reduce your tax bill

Deductions are on gross labour. But tax is on net profit - after materials, van, tools, insurance. The gap often creates a refund.

3

Claim via Self Assessment

File your return by 31 January. Declare income and expenses, offset your CIS deductions, and HMRC pays the refund - usually within 5-10 working days.

Common questions