CIS Refund Guide for Subcontractors
If you work as a CIS subcontractor, tax has already been taken off your payments before you saw the money — 20% if you were verified with HMRC, 30% if you were not. That is a payment on account, not your final tax bill.
Once your accounts and tax return are prepared, those deductions are set against what you actually owe. In most years that produces a repayment.
Why there is almost always a repayment
The deduction comes off your gross payments. It takes no account of your personal allowance, none of your expenses, and — if it was applied correctly — it should not have touched materials at all.
So a subcontractor with ordinary running costs has usually overpaid well before the year ends.
A worked example
A subcontractor paid £38,000 in the year, verified at 20%, with no materials and £6,000 of allowable expenses:
| Paid to you before deductions | £38,000 |
| CIS deducted at 20% | £7,600 |
| Less allowable expenses | £6,000 |
| Taxable profit | £32,000 |
| Income tax due | £3,886 |
| Class 4 National Insurance due | £1,166 |
| Total tax and NIC due | £5,052 |
| Repayment due to you | £2,548 |
Figures use the 2026/27 personal allowance of £12,570, basic rate of 20% to £50,270, and Class 4 National Insurance at 6% between £12,570 and £50,270. This is an illustration on the assumption that CIS work is your only income. Your own position will differ.
Three things that change the number
Materials
CIS applies to the labour element only. If a contractor deducted tax from the materials you supplied, that is an error and it increases your repayment.
The 30% rate
If 30% was taken rather than 20%, you were not verified with HMRC by the contractor. Registering brings the rate down, and the extra already deducted comes back through your return.
Expenses actually claimed
Tools, van running costs, insurance, protective clothing, use of home and accountancy fees all reduce the profit the tax is calculated on. The most common reason a repayment is smaller than it should be is expenses that were never recorded.
Gross payment status
Subcontractors who meet HMRC’s turnover, business and compliance tests can be paid gross, with no deduction at all. It improves cash flow considerably. The compliance test is the one that catches people, because a history of late returns or late payments will fail it.
Work out your own position
Send us your CIS statements and a note of your expenses and we will tell you what the repayment looks like before you commit to anything. We act for subcontractors across Magherafelt, Cookstown, Maghera and the wider Mid Ulster area, and we deal with the contractor side of the scheme too.
Common questions
How much CIS tax do I get back?
It depends on your profit after expenses. The deduction is taken from gross payments without regard to your personal allowance or your costs, so most subcontractors with ordinary expenses have overpaid and receive a repayment once the return is filed. On £38,000 of payments with £6,000 of expenses, the repayment is roughly £2,500.
Is CIS deducted from materials?
No. CIS applies to the labour element only. If materials were included in the amount taxed, that is an error and it increases your repayment.
Why was 30% deducted instead of 20%?
Because you were not verified with HMRC by the contractor. Registering and being verified brings the rate down to 20%, and the extra 10% already deducted is recovered through your tax return.
How long do I have to claim a CIS refund?
Four years from the end of the tax year concerned. After that the repayment is lost.
When will I get the money?
After the tax return for the year is filed. The tax year ends on 5 April, so returns can be filed from 6 April and repayments are usually issued within a few weeks of filing.