How the CIS Tax Refund Works in the UK: What You Need to Know

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How the CIS Tax Refund Works in the UK: What You Need to Know

Did you know that you may be eligible for a CIS tax refund if you are a member of the Construction Industry Scheme (CIS)? As a self-employed contractor, you may recoup many of your company expenditures by deducting them from your salary during the year.

Subcontractors in the construction business who are CIS-registered can claim tax reduction on qualified costs on their CIS tax return.

Many contractors are unaware of how much they are entitled to. That is where you will want the assistance of a professional.

What is the CIS Tax Scheme?

The CIS Tax Scheme was established to prevent cases of tax avoidance in the construction sector. Any firm that hires subcontractors must register with the CIS Scheme, keep detailed records of all transactions with the subcontractor, and make monthly reports to HMRC.

As a subcontractor, you must be self-employed as well as CIS registered. You must file the standard self-assessment tax return and provide information on your CIS tax obligations.

Unlike other self-employed employees, your principal contractor will make your monthly HMRC contributions in the Construction industry. These contributions do not take into account your tax-free personal allowance or any other business expenditures that can be claimed.

How to Get a CIS Tax Refund

Because the CIS regulations require a certain sum to be deducted each month, it is usual for subcontractors to have overpaid tax by the end of the fiscal year.

In addition to submitting your self-assessment tax return as usual, you will be expected to identify any deductions taken on your behalf by contractors throughout the year. HMRC will calculate your tax bill and National Insurance payment for the year based on the information you give. If HMRC discovers that you have paid too much, they will return any overpayment total to you.

In addition to overpayment of tax due to contractor deductions, your costs significantly impact whether or not you may claim CIS tax back. 

It is strongly advised that you consult with a professional CIS tax bookkeeper to ensure that your CIS return information is correct and entirely in legal compliance. If you report too few expenditures, you will not receive the full return; nevertheless, you may face prosecution and significant fines if you overstate your expenses (even if unintentionally).

Am I Qualified For a CIS Tax Refund?

If you are a subcontractor and have paid too much tax, you may be eligible for a CIS tax refund. You are responsible for paying the right amount of tax for your small business as a subcontractor, regardless of whether you are registered with CIS.

What Can I Deduct on My CIS Tax Return?

Under CIS, you can claim for a wide range of expenditures. The following are the most often used by our CIS clients:

  • Business travel expenses, including public transportation and the cost of your motorcycle, van, or automobile
  • Tools and equipment – as well as any necessary protective apparel
  • Accommodation and food – especially if you must remain away from home
  • Home use – includes mobile phone costs
  • Insurance, accountant’s fees, and bank costs are examples of professional fees.

It’s a good idea to preserve your receipts for everything you buy, as well as a record of where you went and when you went.

How Much of My CIS Tax much of my CIS tax refund will I receive?

The amount of money you may be able to claim back will be determined by several factors, including:

  • Your total earnings
  • How much tax you paid
  • Your total expenses

As a general rule, most CIS subcontractor customers receive a refund of around £2300.


The Construction Industry Scheme is designed to eliminate tax avoidance by construction companies. However, it is up to the subcontractor to make the necessary tax claim.

If you are working as a subcontractor, you need to know how to get your CIS tax refund. To make sure of your legal status and your eligibility for tax claims, you need professional assistance from a reputable firm.

We can assist you with everything required to claim a tax refund you may have. All UK claims may be calculated using our Tax Refund Calculator. Make an application for a tax refund right now!