CIS Refunds for Subcontractors: A Plain-English Guide

If you are a self-employed subcontractor in construction, there is a strong chance HMRC is sitting on money that belongs to you. Most subcontractors we work with have never claimed; some have not filed a Self Assessment in years. Both are normal — and both are usually straightforward to put right.

What CIS actually does

Under the Construction Industry Scheme, when a contractor pays a subcontractor, they deduct tax from the payment before handing the rest over and pass that tax directly to HMRC. The standard deduction is 20%; if you are not registered with HMRC at all, the rate is 30%.

The idea is rough-and-ready withholding — HMRC gets paid up front, you settle up at the end of the year through a Self Assessment return. The catch is that the 20% (or 30%) deduction does not account for any of your expenses, your personal tax allowance, or your individual circumstances. It is a flat blunt instrument.

Why deductions almost always overshoot

The deduction is based on your gross earnings — before you have paid for tools, materials, travel, workwear, insurance, your phone, your accountant or anything else. Your actual taxable profit is usually meaningfully lower than your gross. The Self Assessment return is what reconciles the two.

For most subcontractors, the result is a refund. Sometimes a small one, often a few thousand, occasionally significantly more — particularly if you have not filed in several years.

What you can claim against your earnings

The standard list, all reducing your taxable profit:

• Tools, equipment and replacement
• Materials and consumables you have paid for
• Workwear and PPE
• Travel between sites (mileage or actual costs)
• Mobile phone usage for work
• Insurance (public liability, tool insurance)
• Accountancy fees
• A reasonable share of home-office costs if you do paperwork from home

Keep receipts where you can; mileage logs where you cannot. HMRC will accept reasonable estimates supported by evidence.

How the claim actually works

You (or your accountant) submit a Self Assessment tax return for each year. The return shows your gross income, the CIS tax already deducted, your expenses, and your taxable profit after personal allowance. HMRC reconciles the figures and pays out any refund due, usually within a few weeks if everything is clean.

If you have never filed, you may need to register for Self Assessment first; if your circumstances are unusual, HMRC will sometimes ask follow-up questions. Most claims are settled without query.

How far back you can go

You can normally submit returns for the previous four tax years. After that, the refund window closes. So if you have not claimed for 2022/23, 2023/24, 2024/25 or 2025/26, those years are still claimable; earlier than that, the money is generally lost.

The takeaway: if you have not filed in years, the clock is running.

Common situations

• Multiple contractors in a year: all CIS deductions count; the return aggregates them.
• Deducted at 30% rather than 20%: the refund is usually larger, not smaller — the 30% rate over-deducts even more.
• Gross payment status: if you have applied for and received gross status from HMRC, no deductions are made and you settle through Self Assessment normally.
• Mix of employment and CIS: the return handles both; sometimes a refund arises across the two.

What it costs to get help

We charge a flat fee for CIS refund work, agreed up front before we start. No percentage of your refund, no commission. What HMRC sends you is yours. If you would rather have it handled, our CIS Refunds service is exactly that — we deal with the paperwork, the contractors and HMRC; you get the money.

Common questions

How do I claim back CIS tax as a subcontractor?

You submit a Self Assessment return for each year in which CIS deductions were taken. The return reconciles your gross earnings, the tax deducted, and your actual expenses and allowances. HMRC pays any refund directly to you.

How many years of CIS refunds can I claim?

Generally the previous four tax years. After that, the refund window closes and the money is lost.

Can I still claim if I have never filed a tax return?

Yes. You may need to register for Self Assessment first and the returns can be filed retrospectively for the years still in scope. This is one of the most common situations we handle.

Do you charge a percentage of the refund?

No. We charge a flat fee for CIS refund work, agreed up front. What HMRC sends is yours.

This article is general information, not personal tax advice, and tax rules change. Your own position depends on facts we cannot see from here — please take advice before acting on anything above.

← All articles