How do construction workers claim a CIS tax refund?
Under the Construction Industry Scheme, contractors deduct tax from subcontractors’ payments and pass it to HMRC. Because these deductions are made before expenses and allowances are taken into account, many subcontractors end up overpaying and can claim a refund after the tax year ends.
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Check what you're owed →The Construction Industry Scheme, or CIS, requires contractors to deduct an amount from what they pay subcontractors and send it to HMRC as a payment towards the subcontractor’s tax and National Insurance. The deduction is taken from your payments during the year, before your business expenses and personal allowances reduce what you actually owe.
Because of this, subcontractors frequently have more tax deducted over the year than their final bill turns out to be, once their Personal Allowance and allowable expenses — such as tools, travel and materials — are taken into account. When you complete your Self Assessment, the CIS deductions already made are set against your final liability, and any excess is refundable.
Keeping good records is essential: your CIS deduction statements from contractors, plus evidence of your business expenses, are what allow you to claim the right refund. Many subcontractors are due money back each year, so filing your return promptly and accurately, and checking that all your deductions are accounted for, helps you recover what you have overpaid.
How to claim a CIS tax refund
- Collect deduction statements. Gather the CIS statements from each contractor showing how much tax was deducted from your payments.
- Total your expenses. Add up your allowable business costs, such as tools, travel and materials, with supporting records.
- File Self Assessment. Complete your tax return, entering your income, CIS deductions and expenses so HMRC works out your refund.
- Receive your refund. HMRC sets the deductions against your bill and repays any overpaid amount to you.
Frequently asked questions
- Why do CIS subcontractors often overpay?
- Because deductions are taken from payments before expenses and allowances are applied, so the amount deducted is often more than the final tax due.
- How do I claim a CIS refund?
- Through Self Assessment, where your CIS deductions are set against your final tax bill and any overpayment is refunded.
- What records do I need?
- Your CIS deduction statements from contractors and evidence of allowable business expenses such as tools, travel and materials.
- What expenses can reduce my bill?
- Genuine business costs like tools, equipment, travel for work and materials can reduce your taxable profit and increase any refund.
MoneyFinder is an independent sign-posting service that helps you find financial support you may be entitled to. We are not a government body and do not provide financial advice. Figures are taken from the official sources cited above and were correct when last checked — always confirm current details on the linked GOV.UK pages.