How to Claim Your CIS Tax Refund in 2025/26

If you're working in construction as a subcontractor, there's a decent chance you're entitled to a CIS tax refund. We're talking hundreds, sometimes thousands of pounds you could get back. The tricky bit? Most people don't claim it. Let's walk through exactly how it works and how much you could be owed.

What Is CIS, Really?

The Construction Industry Scheme (CIS) is a tax system designed specifically for construction workers and subcontractors. Rather than dealing with tax like most workers, the CIS operates differently—your contractor deducts tax directly from your payments before you receive them.

Think of it this way: you invoice your contractor for £1,000 worth of work. But because you're registered under CIS, they don't pay you the full £1,000. Instead, they hold back a percentage (either 20% or 30%, depending on your status) and pay that directly to HMRC on your behalf. You get roughly £800 or £700 depending on the rate, and the contractor sends the difference to the taxman.

This sounds a bit rough, but here's the good news: if you haven't actually earned enough to owe that much tax (or any tax), you can claim that money back. That's your CIS tax refund.

Who Qualifies for a CIS Tax Refund?

Not everyone gets a refund, but most subcontractors do. Here's the straightforward version:

• You're registered with HMRC as a CIS subcontractor – without registration, the deductions don't apply in the first place
• Your actual tax liability is lower than the deductions taken – this is the key bit. The tax held back isn't always what you'll actually owe
• You're self-employed or running a limited company – both can claim, but the amounts differ
• You've earned income from CIS-registered contractors – only payments from registered contractors count

The most common scenario? A bricklayer, electrician, or plumber earning £30,000–£50,000 per year gets 20% deducted (£6,000–£10,000), but only actually owes £4,000–£7,000 in tax. That difference is your refund—potentially £2,000–£3,000 waiting to be claimed.

Understanding CIS Deduction Rates: 20% vs 30%

There are two deduction rates, and which one applies to you depends on your status:

Rate	Who Pays This?	Why?	Refund Potential
20%	CIS-compliant subcontractors (self-employed)	You've met HMRC's compliance standards and provided proper documentation	Higher refund (often £2,000–£5,000+)
30%	Non-compliant or new subcontractors	You haven't yet met HMRC's standards or provided required documentation	Lower refund (often £500–£2,000)
0%	Limited companies with gross income under £30,000	Your company's turnover is below the threshold	No deductions taken

So if you're at 30% and you move to 20% status (which is possible if you sort your paperwork and registration), you suddenly have a much bigger refund waiting for you. We help loads of people do exactly that.

How CIS Deductions Actually Work (The Numbers Behind It)

Let's use a real example. Say you're a self-employed electrician earning £40,000 in the 2025-26 tax year, all from CIS-registered contractors:

That's real money. And if you've been contracting for three or four years without claiming? You can claim back up to four tax years, so potentially £10,000+ is sitting there.

Step-by-Step: How to Claim Your CIS Tax Refund

1. Gather your CIS deduction statements – You'll need documents from each contractor showing how much they deducted from you. Your accountant usually has these, or ask your contractors directly.
2. Calculate your actual tax liability – Add up all your income (not just CIS), subtract your allowances and expenses, and work out what you actually owe. This is where an accountant saves you money—get it wrong and you could miss out on part of your refund.
3. File a Self Assessment tax return – Include your CIS income and deductions. If you haven't filed in previous years and want to claim back multiple years, you'll need to file returns for each year.
4. Claim the refund – In the tax return, you'll show the deductions taken and your actual tax liability. The difference is your refund claim. HMRC processes this and sends the money back (usually within 4–8 weeks).
5. Check your bank – HMRC will deposit it directly to your account. Job done.

Common Mistakes That Cost You Money

We see these slip-ups regularly, and they all cost people real money:

• Not registering as CIS – If you're not registered, contractors can't deduct properly, but you also can't claim back. First step: check your registration status.
• Claiming without filing a tax return – You need a formal tax return for HMRC to process your refund. A rough calculation won't cut it.
• Including non-CIS income incorrectly – If you've earned from both CIS contractors and other sources, you need to calculate properly. Get this wrong and your refund shrinks.
• Forgetting about expenses – Tools, fuel, vehicle costs, training—all reduce your taxable income. Fewer people forget this than they used to, but it still happens. Claim every expense you're entitled to.
• Waiting too long to claim – You can only claim back four tax years. If you were deducted in 2020-21 and haven't claimed, that deadline is approaching fast.
• Missing the filing deadline** – HMRC has deadlines. Miss them and you lose your right to claim. It's strict, but it's fair warning.
• Assuming all your deductions are actually CIS – If a contractor paid you via payroll instead of CIS, that's different tax treatment. Double-check which is which.

How Much Is Your Average CIS Refund Worth?

There's no "average" because everyone's earnings are different, but here's what we typically see:

Annual CIS Income	Typical 20% Deduction	Typical Refund
£20,000	£4,000	£1,000–£1,500
£30,000	£6,000	£1,500–£2,500
£40,000	£8,000	£2,000–£3,500
£50,000	£10,000	£2,500–£4,500
£75,000	£15,000	£4,000–£7,000

These are ballpark figures, of course. Your actual refund depends on your personal allowance, any other income or losses, and your deductions. But the key takeaway: most tradespeople are owed a few thousand pounds, and a lot of them don't realise it.

Self-Employed vs Limited Company: Which Gets More Back?

This is an important one because the answer might surprise you.

Self-employed (sole trader): You get CIS deductions taken from your payments. You then claim the refund against your personal income tax. You also get your personal allowance (£12,570 in 2025-26), which reduces your taxable income. This usually means a decent refund.

Limited company: Here it's trickier. Your company receives payments without CIS deductions if your turnover is under £30,000. If you're over that threshold, you might get 30% deductions. But here's the thing: your company pays tax at 19% (the current corporation tax rate), which is lower than the 20% or 30% deduction. So you might owe less tax than was deducted, meaning a refund. But there's also dividend tax to consider if you take profits out as dividends—the maths gets complicated quickly.

The bottom line? Self-employed subcontractors typically get a larger refund, but there are exceptions. If this applies to you, it's worth getting the numbers crunched properly.

Tax Years You Can Claim For (And the Deadlines)

You can claim back up to four previous tax years. Here's what's available right now:

• 2025-26 tax year – Ongoing. You can claim this once the tax year ends (5 April 2026) and you've filed your return.
• 2024-25 tax year – Fully claimable now. Deadline for filing the return: 31 January 2026.
• 2023-24 tax year – Fully claimable. Deadline for filing: 31 January 2025 (already passed, but you can still claim if you file late—HMRC will charge interest).
• 2022-23 tax year – Claimable, but only until 5 April 2026 (four years from the end of the tax year). After that, you've missed the window.
• 2021-22 and earlier – Outside the four-year window. You can't claim anymore.

The moral of the story: if you've been working in construction for several years, claim sooner rather than later. Every month that passes is a month closer to losing your right to claim.

CIS Refund Estimator

Want a quick estimate of what you might get back? Use our calculator below. Just enter your annual turnover and your CIS deduction rate, and we'll give you a rough idea:

Mistakes to Avoid When Claiming

Now you know the process, let's talk about things that derail claims:

• Mixing CIS and PAYE income – If you've worked for different employers using different tax systems, make sure each is recorded correctly. Mixing them up reduces your refund or even creates a tax bill.
• Not keeping records – HMRC might ask for evidence: invoices, bank statements, CIS deduction statements. Have them ready. If you can't prove it, you lose it.
• Filing late** – There's a four-year window to claim, but filing delays within that window can cost you money in interest. File promptly.
• Being vague about expenses – Be specific about what you claim. "Business costs" is vague. "Vehicle fuel (£200), tools (£150), training (£100)" is clear and defensible.

Final Thoughts: Is It Worth Claiming?

Absolutely. Most subcontractors we work with get £1,500–£4,000 back. That's real money. Even if you use an accountant or agent to file your return, the refund usually far outweighs the cost.

The only scenario where it's not worth claiming is if you genuinely earned nothing from CIS contractors that tax year. Otherwise, leave that money on the table and you're just funding the government for free.