How to Claim a CIS Tax Refund: A 2026 UK Guide

A Construction Industry Scheme (CIS) tax refund is money HMRC pays back to a subcontractor when a contractor deducts more CIS tax than the subcontractor actually owes.

Most subcontractors end up in this position because deductions are calculated on gross pay before expenses and allowances are taken into account.

Here’s everything you need to know about the CIS tax refund, including how to claim it and when.

Key points

• Most CIS refunds are claimed after the tax year ends 🗓️
  Most subcontractors claim through their Self Assessment tax return after 5 April. Once your accounting period for the year has ended, you may be able to make an in-year repayment claim using form CIS40 or CIS41.
• Keep your CIS statements and expense records 📄
  Your Payment and Deduction Statements show how much CIS tax has been deducted. Keep these alongside records of allowable expenses such as tools, protective equipment, and qualifying travel so you can report accurate figures.
• Your refund depends on your final tax bill 🧮
  You won't necessarily get back everything deducted under CIS. HMRC compares your total CIS deductions with your final Income Tax and National Insurance bill. Other tax you owe may also affect the amount you receive.
• ANNA can simplify your CIS tax admin 🚀
  ANNA keeps your income, CIS deductions, receipts, and business expenses organised in one place, with automatic bookkeeping, expense categorisation, and real-time tax estimates.

What is the Construction Industry Scheme?

CIS is an HMRC scheme that sets out how contractors pay subcontractors for construction work.

Instead of paying you gross, a contractor deducts tax at source and sends it straight to HMRC on your behalf. It covers most work in the industry, from site preparation and demolition to repairs and installations.

The deduction rate depends on your CIS status:

Registration for subcontractors is optional, but the CIS deduction rate is lower if you register.

You can also apply for gross payment status if you meet HMRC's qualifying conditions. If you’re approved, contractors don’t deduct CIS tax from your payments. You receive the full amount and pay the tax and National Insurance you owe through Self Assessment.

CIS deductions aren’t calculated on every pound of your invoice. Before applying the CIS rate, contractors exclude amounts such as VAT, qualifying materials you've paid for yourself, and certain other costs.

The CIS tax deducted is treated as an advance payment towards your tax and National Insurance bill. When you complete your Self Assessment, HMRC compares the amount already deducted with what you owe. If you've paid more than your final liability, HMRC refunds the difference.

Why CIS refunds are common

CIS tax is taken off before your expenses and Personal Allowance are factored in, so it rarely matches your final bill.

Once you deduct expenses like tools, travel between sites, and materials you've paid for yourself, your taxable profit drops, and your Personal Allowance covers a chunk of what's left tax-free.

Subcontractors on lower incomes tend to receive the largest refunds because more of their income falls within the tax-free allowance. If you've had a quiet year or worked for several contractors on and off, it's a good idea to check whether you qualify for a refund.

💡 Did you know?

ANNA’s Auto Accountant can help organise and total your CIS deductions and business expenses, so your figures are ready for review when you file.

When can you claim a CIS tax refund?

For most subcontractors, you claim your CIS refund after the end of the tax year, once you've completed your Self Assessment tax return. The UK tax year runs from 6 April to 5 April, so you can claim for the previous tax year once it has ended.

You may also be able to claim a repayment during the year, whether you’ve carried on trading or not.

You claim separately from your annual Self Assessment return, using form CIS40 for an individual or CIS41 for a partnership. HMRC will only repay you once your relevant accounting period has ended, you’ve filed any outstanding returns, and you’ve paid any tax you owe.

Who can claim a CIS tax refund?

You can claim a refund if:

• You're a subcontractor working under CIS, registered or not
• The total tax deducted from your payments exceeds your actual tax and National Insurance bill for the year

This mainly applies to sole traders and partners in a partnership, who report their CIS income and deductions through Self Assessment. Partnerships report CIS deductions on the partnership return and the individual partners' returns.

You're also eligible if you've mixed CIS work with employment elsewhere or stopped subcontracting partway through the year. What matters is that the tax was deducted under the scheme, and your final bill was lower than the amount already paid.

How do limited companies claim CIS tax refunds?

Limited companies claim CIS deductions differently. They normally report the deductions through their monthly payroll scheme, using an Employer Payment Summary (EPS), and set them against PAYE and National Insurance bills.

Any deductions that can’t be used during the tax year can be carried forward, and HMRC can repay any remaining amount after the end of the tax year.

A limited company shouldn’t claim its CIS deductions through its Corporation Tax return.

How to claim your CIS tax refund

You claim your refund through Self Assessment. Here’s how to do it:

• Gather your Payment and Deduction Statements: Your contractor should give you a statement showing how much you were paid and how much CIS tax was deducted. You should receive at least one statement for each tax month in which you received a payment. If a statement is missing, request it from the contractor.
• Add up your total CIS deductions: Total the CIS tax deducted across all contractors for the tax year. Keep your statements as evidence in case HMRC needs to check your claim.
• Work out your allowable expenses: Gather receipts and records for expenses you've incurred wholly for your business, such as tools, protective equipment, qualifying travel, and other allowable costs. These reduce your taxable profit and can reduce your final tax liability.
• Register for Self Assessment if you haven't already: If this is your first tax return, you'll need to register with HMRC and get a Unique Taxpayer Reference (UTR) before submitting your return.
• Complete your Self Assessment return: Report your CIS income and allowable expenses on the self employment pages using SA103S for the short version or SA103F for the full version. Enter your CIS deductions in the dedicated section. CIS income shouldn’t be reported as employment income on SA102.
• Submit your return and wait for HMRC's calculation: HMRC will compare the CIS tax you've already paid with your actual tax and National Insurance bill. If the amount deducted is greater than your liability, HMRC will repay the excess. If you still owe tax, you'll need to pay the outstanding amount.

🧠 Good to know

If you file Self Assessment tax returns, ANNA can simplify the process by keeping your business finances and tax records organised throughout the year, making the information readily available when it's time to file.

What if your CIS deduction is missing or incorrect?

Check your Payment and Deduction Statements against the CIS deductions shown in your records before filing your return.

If a statement is missing and the contractor can’t provide one, particularly because they’ve stopped trading, contact HMRC and provide details of the contractor, the payments received, and the deductions made.

Keep your CIS statements and other supporting records in case HMRC asks you to provide evidence of the deductions.

🧠 Good to know

Your Payment and Deduction Statements are evidence of the CIS tax deducted, but they don’t replace your Self Assessment return. For an annual claim, you need to report the CIS deductions through your tax return.

When will you get your CIS tax refund?

HMRC will calculate your repayment after processing your Self Assessment return. Processing times can vary and may be longer if HMRC needs to carry out additional checks or verify your CIS deductions.

Make sure your return includes the correct CIS figures, and keep your UTR, Payment and Deduction Statements, and expense records available. That way, if HMRC asks for more information, you can respond promptly and avoid delays.

How ANNA helps with your CIS tax refund

When your CIS deductions, expenses, and other business costs are scattered across documents and bank feeds, filing your Self Assessment is a scramble, and you can easily miss deductions that can increase your refund.

ANNA brings your business finances together in one place, so your figures are ready by January.

ANNA can help with:

• Automatic bookkeeping: Keep your income and business expenses organised as transactions happen
• Receipt capture: Store receipts digitally, so you have a clear record of your business spending
• Dedicated business account: Keep your business income and spending separate from your personal finances, making your bookkeeping easier to manage
• Expense categorisation: Automatically organise transactions into the right categories, so it’s easier to track your business costs
• Real-time tax estimates: Plan ahead with an up to date estimate of your tax liability as your income and expenses change
• Smart Pots: Set money aside for your tax bill as you earn, so you’re less likely to be caught short when payment is due
• Invoicing: Create and send professional invoices, then monitor what you've been paid and what is still outstanding
• Tax filing support: Get help preparing and filing your tax return when it's time to submit
• Smart reminders: Stay on top of important tax deadlines and other financial admin with helpful reminders
• 24/7 UK-based support: Get expert help whenever you need it

Sign up with ANNA today and get your CIS records in order before your next return.