CIS tax rebate: how subcontractors claim back their deductions

A CIS tax rebate is the money HMRC pays back when the deductions contractors took from your pay come to more than the tax and National Insurance you actually owe. If you are a self-employed subcontractor, you do not fill in a separate refund form: you send your Self Assessment return, put your gross pay in as income and your total CIS deductions in their own box, and HMRC repays the difference. Limited companies claim through payroll and then online once the tax year has ended.

For the 2025/26 tax year, the online return is due by 31 January 2027. Here is how the sum works, and how to make sure it comes out in your favour.

Why so many subcontractors are owed money

Under the Construction Industry Scheme, a contractor takes 20% off your pay if you are registered for CIS and they can verify you, and 30% if you are not registered or they cannot. Those deductions are advance payments towards your tax and National Insurance, not a tax bill in themselves.

The catch is that 20% comes off your whole pay, while your tax is worked out on your profit: pay minus allowable expenses, with the first £12,570 tax-free under your Personal Allowance. Once tools and van miles are taken off, the tax due is often less than what was deducted. The rebate is the gap.

Some of your invoice is never deducted from at all. Contractors do not deduct CIS from the parts of your invoice that are VAT, materials you paid for yourself, consumable stores, plant hired for the job, or the cost of manufacturing or prefabricating materials. Itemise materials on your invoices and keep the receipts: your contractor may ask for them, and without evidence they estimate the cost themselves.

How to claim a CIS tax rebate as a sole trader

1. Collect every payment and deduction statement. Each contractor must give you one within 14 days of the end of each tax month, showing what they paid you and what they deducted. If one is missing, ask them for it.
2. Add up your allowable expenses for the year (more on these below).
3. File your Self Assessment return. On the self-employment pages, put your total pay before deductions as turnover (box 9 on the short pages, SA103S), and the total CIS deductions from your statements in box 38. You do not send the statements with the return, but keep them in case HMRC asks.
4. Give your bank details on the return, so a refund can be paid straight into your account.

HMRC then works out your tax and Class 4 National Insurance, takes off what contractors deducted, and either bills you for the rest or pays you back. You can file any time from 6 April after the tax year ends, so there is no prize for waiting until January.

A worked example for 2025/26

Take a joiner outside Scotland, with no other income, paid £30,000 for labour in 2025/26. Contractors deducted 20%, so £6,000 went to HMRC during the year. Her allowable expenses:

Her profit is £30,000 minus £4,300, which is £25,700. Taking off the £12,570 Personal Allowance leaves £13,130 taxable.

The receipts and mileage log are worth £1,118 here: every pound of allowable expense saves 26p at these rates. There is no Class 2 to pay either, since her profits are above the small profits threshold, which means Class 2 is treated as paid.

Student loans, other income, losses and payments on account all change the answer, so treat this as an illustration, not a forecast.

What can I claim on CIS?

A CIS subcontractor claims the same allowable expenses as any other sole trader. In the trade, these are the lines that matter.

• Vehicle. Either the simplified flat rate per business mile, or the business share of actual running costs, but not both for the same vehicle, and once a vehicle is on the flat rate it stays there. The flat rate was 45p a mile for the first 10,000 miles in 2025/26 and is 55p from 6 April 2026, then 25p. Parking and tolls go on top. Our guide to HMRC mileage rates for 2026/27 has the full table.
• Travel. GOV.UK rules out travel between home and work. Where "work" is for someone who moves between sites depends on the facts, so if you spend long stretches on one site, ask an accountant before claiming the drive.
• Protective and work clothing. Safety boots, hard hats, and overalls you only wear for work. Everyday clothes are out, even if they are covered in plaster.
• Tools and equipment (an expense under cash basis, capital allowances under traditional accounting), plus phone, insurance, accountancy fees and materials bought for jobs.

The longer version, with what not to claim, is in allowable expenses for sole traders. Whatever you claim, keep the evidence: HMRC can ask, and how long to keep receipts covers how long for.

Limited companies: a different route

If you work through your own limited company, the Self Assessment route is not for you. The company uses its CIS deductions against its PAYE bill: send the Full Payment Submission as usual, and an Employer Payment Summary with the year-to-date CIS deductions. Do not put them on the Corporation Tax return, as that can bring a penalty.

Deductions left over after the tax year ends are claimed online or by post, for up to six past tax years, once every FPS, EPS and Company Tax return is in. HMRC first clears any overdue PAYE or Corporation Tax, then refunds the rest or puts it towards VAT or Corporation Tax, and says it usually responds within 8 weeks.

Can I claim a CIS refund before the tax year ends?

Only in narrow cases. A sole trader who has stopped trading can claim back that year's deductions on form CIS40, online or by post (partners use CIS41). Otherwise the claim goes on your return after 5 April. A limited company can claim in-year only if it has stopped trading or had deductions taken after moving to gross payment status.

The other way out of the wait is gross payment status: contractors pay you in full and you pay all your tax at the end of the year. A sole trader needs a turnover of at least £30,000 (ignoring VAT and materials), a record of paying on time, and a business run through a bank account.

Frequently asked questions

How long does a CIS tax refund take?

GOV.UK gives no fixed time for refunds through Self Assessment. Its "check when you can expect a reply" tool shows current timescales. HMRC may not pay a refund if you have tax due in the next 45 days, such as a payment on account; it takes it off what you owe instead. For limited company claims, HMRC says it usually responds within 8 weeks.

What is the CIS tax rebate deadline?

There is no separate one: the rebate comes through your return. For 2025/26, the paper deadline was 31 October 2026 and the online deadline is 31 January 2027. Miss it and the late filing penalty starts at £100, which is an odd thing to pay while waiting for a refund.

How do I claim a CIS refund for a limited company?

Set the deductions against the company's PAYE through the EPS during the year, then claim any excess after the year ends. You will need the overpayment figure and your PAYE and Corporation Tax references.

Is there a CIS tax rebate calculator?

HMRC offers a Self Assessment estimate tool, linked from its deadlines page, for a rough figure. The sum itself is the one in the worked example: deductions taken, minus Income Tax and Class 4 on your profit.

Where ClaimSnappy fits

ClaimSnappy does not track CIS deductions; those live on your contractors' statements. It handles the other half of the rebate: the expenses that cut your profit.

On a self-employed desk, you snap receipts (in the browser, camera included) and each one keeps its photo and a category such as Tools and equipment or Uniform and laundry. Business trips are logged with a reason, which every trip needs before it can be saved, and priced at HMRC's rate for the tax year. At year end, the Reports page lays out your allowable expenses under the SA103S boxes 11 to 20, as a working sheet to copy from or send your accountant, with client entertaining listed apart and left out. It is a working sheet, not a return, and the CIS figures in boxes 9 and 38 are still yours to add.

Your accountant can see the records in the free accountant portal. You can try it all on a 30-day trial with no card; after that, Solo is £5 a month. See how it works if you claim for yourself, or compare plans.

Whether a cost is allowable is for you and HMRC to settle. If your year is complicated, an accountant usually costs less than the rebate you would miss.