CIS Subcontractor Tax Refunds - What You Need to Know

If you work in construction as a subcontractor under the Construction Industry Scheme (CIS), there's a good chance HMRC owes you money. Many subcontractors don't realise just how much they could be reclaiming each year.

How CIS deductions work

Under CIS, contractors deduct tax from your payments before you receive them - usually 20% if you're registered with HMRC, or 30% if you're not. This is paid to HMRC on your behalf, treated as an advance payment towards your tax bill.

The catch - these deductions are calculated on your gross pay, not your actual profit after expenses. Most subcontractors have legitimate business expenses (tools, travel, materials, insurance, and more) that reduce their real tax liability — meaning the amount already deducted is often more than what you actually owe.

Why you're often due a refund

Because CIS deductions don't account for your expenses, many subcontractors end up overpaying tax throughout the year. When you file your Self Assessment tax return and your actual expenses are factored in, the difference between what was deducted and what you actually owe often comes back to you as a refund.

Common expenses subcontractors can claim include:

- Tools and equipment
- Protective clothing and workwear
- Travel between job sites
- Vehicle costs and mileage
- Public liability insurance
- Accountancy fees

How to claim your refund

1. Register for Self Assessment if you haven't already
2. Keep clear records of your income (CIS statements from contractors) and expenses throughout the year
3. File your tax return — this is where your refund is calculated and claimed
4. HMRC processes the refund — typically within a few weeks of filing, once everything's in order

Common reasons refunds get delayed

- Missing or incomplete CIS statements from contractors
- Expenses not properly recorded or supported
- Errors on the tax return itself
- HMRC security checks on larger refund claims

Don't leave money on the table

Many subcontractors either don't claim expenses at all, or underclaim because they're not sure what's allowable. A proper review of your income and expenses each year can make a real difference to your refund.

If you're a CIS subcontractor and want to make sure you're claiming everything you're entitled to, get in touch - we handle CIS tax returns regularly and know exactly where subcontractors tend to miss out.