How to Claim Back CIS Tax You've Overpaid

If a contractor has taken 20% or 30% from your construction payments, you've probably paid more tax than you owe. Under the Construction Industry Scheme (CIS), those deductions are advance payments towards your tax bill. Sole traders reclaim them through Self Assessment, while limited companies offset them through payroll and claim any surplus separately.

The deduction doesn't allow for a sole trader's Personal Allowance or business expenses, and that's usually where the overpayment comes from. At TurnerBerry, we help CIS subcontractors in Bristol, Cardiff and across the UK work out what they actually owe and claim back the difference.

Key Takeaways

• Registered and verified subcontractors normally have 20% deducted, or 30% if the contractor can't verify them. Gross payment status means no deduction.
• Deductions exclude VAT and the cost of qualifying materials.
• Sole traders and partners reclaim CIS through Self Assessment. The online deadline is 31 January after the tax year ends.
• Limited companies report deductions through an Employer Payment Summary (EPS) and claim any surplus after the year end.
• Your figures need to match the deductions contractors have reported to HM Revenue and Customs (HMRC).

How CIS Deductions Work

You invoice £3,000 for labour and receive £2,400. The contractor has withheld £600 and paid it to HMRC against your tax record.

CIS collects tax at source across the construction supply chain. It covers work like site preparation, alterations, repairs, decorating and demolition. Architecture, surveying, scaffolding hire without labour and delivering materials generally sit outside it, as do genuine employees paid through Pay As You Earn (PAYE).

If verification fails, check your contractor has the exact name and reference details HMRC holds. Even a small mismatch puts you on the 30% rate. Subcontractors with gross payment status are paid in full and have nothing to reclaim. Our guide to CIS gross payment status explains who qualifies.

The deduction is worked out after taking off VAT and what you paid for materials. Travel you bill and any mark-up on materials count as labour, so they're deducted too. Show labour, materials and VAT on separate invoice lines so the contractor gets it right first time. If a deduction has been taken from the wrong amount, raise it with the contractor straight away rather than waiting for your tax return.

If you also pay subcontractors yourself, keep two figures apart. CIS suffered is tax taken from your payments, and it's what you claim back. CIS deducted is tax you take from others, and you pay it over to HMRC.

How Much Could You Get Back?

Say you're a sole trader in the 2025/26 tax year with £30,000 of labour income, £6,000 of CIS deductions at 20% and £4,000 of allowable expenses. That leaves a profit of £26,000.

Assuming the full £12,570 Personal Allowance, no other income and the Income Tax rates for England, Wales or Northern Ireland:

• Income Tax: £13,430 at 20% = £2,686
• Class 4 National Insurance: £13,430 at 6% = £805.80
• Total liability: £3,491.80

Against the £6,000 already deducted, that's an overpayment of £2,508.20. At the 30% rate, £9,000 would have been withheld and the refund rises to £5,508.20. Scottish rates, other income and your own circumstances will change the figures.

Records You'll Need

• Your Unique Taxpayer Reference (UTR) and National Insurance number.
• Payment and deduction statements from every contractor who deducted CIS.
• Sales invoices and records of all business income.
• Receipts for allowable expenses, such as tools, protective equipment, travel between sites, phone and insurance.
• Bank statements, plus bank details for the repayment.

Contractors must give you a payment and deduction statement within 14 days of the end of each tax month, which runs from the 6th to the following 5th. Chase missing ones early. If a contractor won't respond, your invoices, remittances and bank records can support the figures, and you can report them to HMRC. Keeping your bookkeeping up to date through the year makes all of this much quicker.

Limited companies also need payroll records, EPS submissions and a record of deductions already used against PAYE liabilities.

How to Claim Your CIS Refund

Your business structure decides the route. Company deductions never go on a director's personal tax return.

Sole Traders and Partners

1. Register for Self Assessment by 5 October after the tax year you started trading.
2. Complete the self-employment pages with your full turnover before CIS deductions, including any materials you've recharged, plus your allowable expenses.
3. Enter your total CIS suffered in the contractor deductions field (box 38 on SA103S or box 81 on SA103F).
4. Submit the return and request repayment of any credit.

The return for the year ending 5 April 2026 is due online by 31 January 2027, but you don't have to wait for the deadline. Filing early means getting your refund sooner. Once HMRC processes the return, the credit shows in your online account, although other tax you owe or upcoming payments on account can reduce what's paid out.

If your qualifying income is over £50,000, you're now also under Making Tax Digital for Income Tax, with quarterly updates through compatible software. Your CIS deductions are still reconciled at the year end. Our Self Assessment team can prepare the return and check every deduction against your contractor statements.

Form CIS40 allows an in-year claim, but only for subcontractors who've stopped trading and meet HMRC's conditions.

Limited Companies

A company reports CIS suffered through its payroll using an EPS, so it needs an employer PAYE scheme.

1. Submit the EPS with cumulative CIS suffered for the tax year.
2. Offset it against the company's PAYE and National Insurance liabilities.
3. After 5 April, reconcile what's been used.
4. Claim any remaining surplus online or by post.

Keep form CIS132, or an equivalent record, to track amounts set off. HMRC checks for outstanding liabilities before repaying the balance. The GOV.UK guidance for limited companies has the full claim process.

How Long Does a CIS Refund Take?

No single turnaround covers every claim. HMRC may check the return, match your deductions against contractor records or use the credit against other liabilities first. Its reply checker shows current response times.

Wrong bank details are one of the easiest ways to delay a payment, so double-check them. If the expected time has passed, the CIS contact service can help with deduction queries.

Common Mistakes to Avoid

Before you submit, check that you've:

• Included all business income before CIS deductions.
• Claimed only expenses you can support with records.
• Kept CIS suffered separate from turnover, expenses and any CIS you've deducted from others.
• Reconciled your deductions with contractor statements.
• Used the right claim route for your business structure.

If your records show £5,000 suffered but contractors reported £4,200, find out why before you file. Unexplained mismatches are how claims end up stuck in a query.

Older CIS Claims

Each missed year needs looking at on its own. You may need to file an outstanding return, amend an existing one or make an overpayment relief claim.

Overpayment relief generally has a four-year limit from the end of the tax year, so a claim for 2022/23 has to reach HMRC by 5 April 2027. It must be in writing, state the year, the grounds and the amount with your calculation, and be signed by you personally rather than your agent. If several years are outstanding, start with the oldest.

Get Your CIS Tax Back

Most subcontractors are owed money at the end of the year. The question is how much, and whether every deduction has been picked up.

We'll check your contractor statements against HMRC's records, make sure every allowable expense is claimed and file the return or company claim for you. Once we're authorised as your agent, we deal with HMRC directly if anything needs chasing.

Book a call with our team, or get an instant quote for fixed-fee CIS and tax return support.