How to Claim Your CIS Refund from HMRC

How Do I Claim My CIS Refund from HMRC?

If you’re a subcontractor working under the Construction Industry Scheme (CIS), there’s a good chance that too much tax has been deducted from your payments. Unlike employees on PAYE, subcontractors often face 20 per cent tax deductions from their gross pay before allowable expenses have been taken into account. This means many subcontractors end up overpaying tax and are entitled to a refund from HMRC.

Claiming your CIS refund is straightforward once you know the steps. In this article, we explain how the refund process works, who can claim, how to submit your claim to HMRC, and how long it usually takes to receive your money.

What Is a CIS Tax Refund?

Under the Construction Industry Scheme, contractors deduct tax from payments to subcontractors and send it to HMRC on the subcontractor’s behalf. The standard rate is 20 per cent for registered subcontractors and 30 per cent for those who are unregistered.

However, these deductions are based on gross income and don’t consider your business expenses or tax-free allowances. When you complete your Self Assessment tax return at the end of the tax year, HMRC calculates how much tax you actually owe. If the amount deducted through CIS is more than your final tax liability, you’re due a refund.

This is known as a CIS tax rebate, and you must claim it through the proper channels to get your money back.

Who Can Claim a CIS Refund?

You can claim a CIS refund if:

• You are a self-employed subcontractor working in construction

• You have had tax deducted under CIS during the tax year

• You complete a Self Assessment tax return and your total CIS deductions exceed your final tax liability

If you operate as a limited company, the process is slightly different and involves reclaiming deductions through your PAYE system.

How to Claim a CIS Refund as a Sole Trader

If you are self-employed and working as a subcontractor, follow these steps to claim your CIS refund:

1. Register for Self Assessment

If you haven’t already, you need to register for Self Assessment with HMRC. This can be done online at gov.uk/register-for-self-assessment. You will receive a Unique Taxpayer Reference (UTR) number and be set up for filing tax returns.

2. Collect Your CIS Deduction Statements

Each contractor you work for should provide you with monthly CIS payment and deduction statements. These show how much they paid you and how much tax was deducted. You’ll need this information to complete your tax return accurately.

3. Complete Your Self Assessment Tax Return

At the end of the tax year (5 April), you must complete your tax return. In the section for CIS, you’ll input:

• Total income received from contractors

• Total CIS deductions made

• Allowable business expenses

The return will calculate whether you have underpaid or overpaid tax. If you’ve overpaid, HMRC will issue a refund.

4. Submit Your Tax Return

The deadline for online Self Assessment returns is 31 January following the end of the tax year. Once submitted, HMRC will process your return and issue your refund if one is due.

5. Receive Your Refund

Refunds are usually paid directly into your bank account. If all information is correct and your return is filed early in the year, refunds can be processed within two to four weeks, but during busy periods it may take longer.

How to Claim a CIS Refund as a Limited Company

If you are a subcontractor trading through a limited company, the refund process is different because your CIS deductions are made from income before it reaches your company.

In this case:

• You still register for CIS as a subcontractor

• When you file your Employer Payment Summary (EPS) under PAYE, you declare the total CIS deductions made from your income

• HMRC then offsets this against your company’s PAYE liabilities (for example, tax and National Insurance due for your employees)

• If your CIS deductions exceed your PAYE bill, you can request a refund at the end of the tax year

To do this, you must:

1. Submit your final Full Payment Submission (FPS) and EPS for the tax year

2. Contact HMRC’s PAYE department to request a repayment

3. Wait for HMRC to process the claim and pay the refund to your business bank account

This process can take a little longer than for sole traders, often 6 to 8 weeks, especially if further checks are needed.

What If I Don’t Receive My Refund?

If you’ve completed your return correctly and still haven’t received your CIS refund, check:

• You included your bank details on your Self Assessment

• The tax return was submitted successfully

• HMRC has not requested additional information

You can contact HMRC on 0300 200 3300 for Self Assessment queries or 0300 200 3200 for PAYE if trading as a company.

Make sure you have your UTR and National Insurance or company registration number to hand when you call.

Tips to Speed Up Your CIS Refund

• File your tax return early – you can submit as soon as the tax year ends on 5 April

• Keep accurate records – make sure deduction statements and invoices match

• Double-check your figures – mistakes can delay processing

• Use accounting software – many platforms now handle CIS reporting automatically

• Work with an accountant – a qualified tax adviser can ensure your return is correct and maximise your refund

Final Thoughts

Claiming your CIS refund from HMRC is a vital part of managing your finances as a subcontractor. Whether you operate as a sole trader or limited company, making sure you follow the right steps ensures you get back any tax you’ve overpaid without unnecessary delays.

By keeping organised records and filing your return on time, you can access the money you’re owed and stay in control of your cash flow throughout the year.