CIS guide for subcontractors
CIS tax refunds
Why so many subcontractors end the year owed money by HMRC, what decides how much, and how to claim it back.
The short answer
CIS deductions are payments on account, not your final tax. At the end of the tax year your real bill is worked out on profit — income minus allowable expenses — after your personal allowance.
If more was deducted than you owe, the difference comes back to you. This is common for subcontractors with significant van, tool, fuel or training costs.
What affects the size of your refund
- Total CIS deducted across the tax year (add up your monthly statements)
- Business expenses: van, fuel, tools, workwear, insurance, phone, training
- Your personal allowance and any other income
- Class 4 National Insurance due on profits
- Whether materials were excluded correctly before deductions were taken
What you need to claim
- Your Unique Taxpayer Reference (UTR) and Government Gateway login
- Every monthly CIS payment and deduction statement for the tax year
- Records of business income and expenses, with receipts
- Bank details for the repayment
Estimating it
Use our CIS calculator to check each payment was deducted correctly, then compare your year's total deductions with the tax and National Insurance due on your profit. Your accountant or the Self Assessment return will give the final figure.
This guide is general information, not tax advice. Rules and allowances change each tax year — check gov.uk or an accountant for your circumstances.
CIS refund questions
Why am I owed a CIS refund?
Deductions are taken from your labour before your business expenses and personal allowance are counted. If those deductions add up to more than the tax and National Insurance you actually owe for the year, HMRC refunds the difference.
How do I claim a CIS refund as a sole trader?
Through your Self Assessment tax return after the tax year ends on 5 April. You enter your CIS deductions from your monthly statements, and any overpayment is repaid. The online deadline is 31 January after the end of the tax year, but you can file from 6 April.
How do limited companies get CIS back?
A limited company offsets CIS deductions against its PAYE and other liabilities through its payroll submissions to HMRC, and can claim a repayment of anything left over.
Do I need a refund company?
No. You can file the return yourself or use an accountant. Some refund services charge a percentage of the refund, so compare fees before signing up.