How to Claim a CIS Tax Refund: Step-by-Step Guide for Subcontractors (2025/26)

Under the Construction Industry Scheme, your contractor deducts 20% from the labour part of every payment (30% if you are not registered) and sends it to HMRC. That deduction is an advance payment towards your Income Tax and Class 4 National Insurance.

The flat 20% does not know about your £12,570 Personal Allowance or your business expenses. So for most registered subcontractors, more is deducted during the year than they actually owe. The difference is your refund, and the only way to get it is to claim it.

So the real question is not whether you are owed money. It is how much, for which years, and how long you have left to claim it.

Why Most Registered Subcontractors Are Owed Money

Here is the calculation for a typical 2025/26 return. The rates are Personal Allowance £12,570, Income Tax 20% and Class 4 NIC 6% on profits between £12,570 and £50,270.

The Dates That Decide When You Get Paid

Four dates matter for anyone claiming a CIS refund right now. The first has passed, and the last two close a door for good.

What You Need Before You Start

• Payment and deduction statements from every contractor for 6 April 2025 to 5 April 2026. Contractors must give you one within 14 days of the end of each tax month in which they paid you.
• Your UTR (10-digit Unique Taxpayer Reference) and National Insurance number.
• Records of income and expenses: invoices, receipts, mileage log.
• Bank details for the repayment.
• HMRC online account sign-in to file online.

How to Claim Through Self Assessment: Step by Step

This is the route for sole traders. For the 2025/26 tax year, you can file from 6 April 2026, and the online deadline is 31 January 2027.

1. Total your CIS deductions. Add up the deductions on every statement for the tax year, then check the total against your bank records.
2. Sign in to your HMRC online account and start your Self Assessment return for 2025/26.
3. Complete the self-employment pages. Enter your gross income (labour and materials you invoiced, before any deduction) and your allowable expenses.
4. Enter your CIS deductions in Box 38 on the short pages (SA103S) or Box 82 on the full pages (SA103F). This is the figure HMRC credits against your bill.
5. Add or check your bank details for the repayment.
6. Check the calculation and submit. The online return shows whether you are due a refund before you send it.
7. Track the repayment in your HMRC online account. A status of "pending" means the refund has been created but still needs to be approved and paid.

7 Mistakes That Delay or Shrink Your Refund

Most refund problems are not bad luck. They come from a handful of errors that repeat every year. Which of these could be sitting on your return?

• Your CIS total does not match your contractors' figures. HMRC checks the deductions you claim against what your contractors reported. A missing statement or a typo in your total is enough to hold the refund while HMRC checks. If a contractor's figure is wrong, ask them to correct it before you file.
• Entering what hit your bank as your income. Your bank shows the net amount after the 20% came off. Your return needs the gross figure. Entering net understates your income and creates exactly the mismatch HMRC looks for.
• Claiming costs that are not allowable. Ordinary clothing, travel from home to a permanent workplace and entertaining clients are the usual ones. Claims like these are the first to be challenged.
• Leaving out costs you are entitled to. Mileage, tools, PPE, insurance, the business share of your phone bill and use of home are the costs most often missed. Every £1,000 left out costs a basic-rate subcontractor £260 in tax and Class 4 NIC (£200 + £60).
• Mixing two methods for the same van. You cannot use the flat mileage rate for a vehicle you have already claimed capital allowances on, or included as an expense. Pick one method per vehicle.
• Wrong or missing bank details. The repayment cannot go straight to your account if the details on your return are wrong or missing.
• Forgetting the 45-day rule. If you have tax due in the next 45 days, for example a payment on account, HMRC can take it out of your refund instead of paying the full amount. Payments on account only apply if your last Self Assessment bill was £1,000 or more and less than 80% of your tax was collected at source. If last year ended in a refund, that test is not met, so this mostly affects subcontractors who had a tax bill to pay last year.

Missed Expenses on a Past Return? Two Ways to Fix It

A return you filed is not final. If you left out costs, the overpaid tax can still be recovered. The route depends on how old the year is.

Where missed expenses hide in old records

• Mileage. Use the flat rate for that year: 45p a mile for the first 10,000 business miles in every year before 6 April 2026 (55p from 2026/27), 25p after that. Rebuild journeys from job records, diaries, texts and statements that show site addresses.
• Tools, materials and equipment. Search old bank statements for trade suppliers. A missing receipt does not erase the transaction.
• PPE, workwear and insurance. Safety boots, hard hats, hi-vis, plus public liability and tool insurance premiums.
• Use of home. If you did business admin at home for 25 hours or more a month, the flat rate is £10 a month (25 to 50 hours), £18 (51 to 100) or £26 (101 or more).
• Phone and internet. The flat home rate does not cover these, so claim the business share of the bills separately.

Your lookback review in 6 steps

1. List your open years and their route. 2024/25 can be amended online until 31 January 2027. 2023/24 and 2022/23 need an overpayment relief claim.
2. Get your tax calculation for each year (the SA302 from your HMRC online account) to see exactly what you declared.
3. Download bank statements for each year and mark every business cost.
4. Rebuild your business mileage from evidence, not a round guess. A figure you can back up is a figure you can defend.
5. Work out the difference. Missed costs × your tax rate is your likely refund. At basic rate in 2024/25 and 2025/26, that is 26% (20% Income Tax + 6% Class 4 NIC).
6. Amend online or write to HMRC. An overpayment relief letter must say you are claiming overpayment relief and give the tax year, why you think you overpaid, how much, and whether you have appealed the same payment before. Add a signed declaration that the details are "correct and complete to the best of your information and belief". If anything is missing, HMRC rejects the claim.

Never Filed for a Past Year? The 4-Year Window

If you worked under CIS in past years and never filed, the deductions may still be recoverable. As a general rule, HMRC must receive a claim for overpaid tax within 4 years of the end of the tax year.

In-Year Claims: Form CIS40

Most subcontractors wait until the tax year ends. Form CIS40 lets an individual self-employed subcontractor claim a repayment of deductions during the current tax year, using the online form or a printable form sent by post. If you claim after 5 April, use your tax return instead. Partners use form CIS41. Source: GOV.UK – CIS40.

Limited Companies Claim Differently

If you trade through a limited company, you do not claim through Self Assessment. The company reports the CIS deducted from its income through its monthly payroll submissions, and HMRC sets it against the PAYE and National Insurance the company owes. Any amount left over can be claimed back from HMRC.

Refund Taking Too Long?

Security checks, a contractor's figures not matching yours, or tax due in the next 45 days being taken from the refund are the usual causes. Each has a fix.

Your CIS Refund Checklist

• All payment and deduction statements for 6 April 2025 to 5 April 2026 collected
• CIS total added up and checked against your bank records
• Gross income entered, not the net amount you received
• Expenses totalled, with 2025/26 mileage at 45p a mile
• CIS deductions in Box 38 (SA103S) or Box 82 (SA103F)
• Bank details for the repayment checked
• Return filed as soon after 6 April as possible (paper by 31 October 2026, online by 31 January 2027)
• 2024/25 return reviewed for missed costs before 31 January 2027
• Any missed years back to 2022/23 checked before 5 April 2027
• Records kept for at least 5 years after the 31 January deadline for each year

Frequently Asked Questions