Quick Summary
- Contractors deduct 20% from your labour before expenses or your personal allowance are taken into account — so many subcontractors overpay.
- Sole traders claim the refund through their Self-Assessment tax return, which can be filed from 6 April.
- Limited companies offset CIS suffered against their PAYE bill each month, or claim it back after the tax year.
- Keep every monthly CIS statement and receipts for expenses.
- Online refunds commonly arrive within a few weeks of filing, but HMRC may run checks first.
If you're a subcontractor in the Construction Industry Scheme, there's a good chance HMRC owes you money. Every year, thousands of joiners, labourers, plasterers, roofers and electricians overpay tax through CIS — and some never claim it back. This guide explains how CIS refunds work and how to get yours as quickly as possible.
Why are CIS subcontractors owed refunds?
Under CIS, the contractor deducts 20% from the labour part of every payment. That deduction is a flat rate. It ignores:
- Your personal allowance — the first £12,570 of income is normally tax-free
- Your business expenses — van, fuel, tools, materials, insurance and so on
- The lower starter rate of 19% for Scottish taxpayers on the first slice of taxable income
When your actual tax and National Insurance is worked out on your tax return, it's often much less than the 20% already deducted. The difference comes back to you as a refund.
Example: a self-employed joiner in Glasgow (2025/26)
| Item | Amount |
|---|---|
| Labour income (gross) | £40,000 |
| CIS deducted at 20% | £8,000 |
| Allowable expenses (van, fuel, tools, insurance, phone) | £8,000 |
| Taxable profit | £32,000 |
| Scottish income tax due | about £3,900 |
| Class 4 National Insurance (6%) | about £1,170 |
| Total actually owed | about £5,070 |
| Refund due | about £2,930 |
This is a simplified illustration with no other income. Your refund depends on your own income, expenses and circumstances.
How sole traders claim a CIS refund
- Gather your CIS statements — your contractors must give you one every month showing what you were paid and what was deducted.
- Total up your expenses with receipts, bank statements and mileage records.
- File your Self-Assessment return, entering your gross CIS income, the deductions taken and your expenses. You can file from 6 April, straight after the tax year ends.
- HMRC processes the refund, usually to the bank account on your return.
Filing early is the easiest way to get your money sooner. There is no need to wait for the 31 January deadline. You can usually claim for up to four previous tax years if you never filed or missed expenses.
How limited companies reclaim CIS
If you work through a limited company, CIS deducted from the company's income is reclaimed differently. The company offsets it against the PAYE and National Insurance it owes each month, reported through the Employer Payment Summary (EPS). Any amount left at the end of the tax year can be claimed back from HMRC or set against Corporation Tax. Companies must have filed their payroll submissions correctly, so good payroll records are essential.
Why CIS refunds get delayed
- The deductions you claim don't match what contractors reported to HMRC
- Missing or incorrect UTR on your CIS statements
- Unusually high expenses with no explanation, triggering a check
- Outstanding returns or debts from earlier years, which HMRC offsets first
Checking every statement before filing prevents most delays.
Beware of "no win, no fee" refund firms
Some firms take a large percentage of your refund or ask you to sign forms that let them receive your refund directly. Always check what you're signing and the fee. A fixed-fee accountant who files your full tax return is usually cheaper and also makes sure everything else on your return is right.
Frequently Asked Questions
How long does a CIS refund take?
Refunds claimed through an online Self-Assessment return commonly arrive within a few weeks of filing. They can take longer if HMRC needs to check the figures or your CIS statements don't match contractors' records.
When can I claim my CIS refund?
Sole traders can file their tax return and claim from 6 April, the day after the tax year ends. You don't have to wait until the 31 January deadline.
Can I claim CIS refunds for previous years?
Yes. You can generally claim overpaid tax for up to four previous tax years, for example if you never filed a return or missed expenses.
What if I lost my CIS statements?
Ask your contractors for copies, as they must keep records. Your accountant can also check the deductions HMRC holds on your record before filing.
How much is the average CIS refund?
It varies widely. It depends on your income, expenses and other earnings. Subcontractors with significant expenses or lower profits often get back between a few hundred and a few thousand pounds.
Owed CIS Tax?
We check your CIS statements, claim every allowable expense and file early so your refund arrives as soon as possible.
Sardar Muhammad, AAT
Sardar is the founder of LimeTree Accounting Solutions, an AAT-accredited practice in Govanhill, Glasgow. He works with sole traders, tradespeople, landlords and small limited companies across Glasgow and Clydebank.
This guide is general information based on UK and Scottish tax rules as at 13 October 2026. It is not personal advice. Rates and thresholds change, so speak to us about your own situation.