CIS Tax Refunds — How Construction Workers Can Claim Back Overpaid Tax

Are You Owed a CIS Tax Refund?

If you work in the construction industry as a subcontractor, there is a strong chance HMRC owes you money. Under the Construction Industry Scheme (CIS), contractors deduct tax from your payments before you receive them, but these deductions are taken on your gross income, before your allowable expenses and personal tax-free allowance are considered.

The result? Thousands of construction workers across the UK overpay tax every year and never claim it back. At YRF Accountants, we help subcontractors in Bolton, Manchester, and across the UK recover every penny they are owed quickly and hassle-free.

What Is the Construction Industry Scheme (CIS)?

CIS is a HMRC scheme that requires contractors to deduct tax directly from subcontractor payments and pass it to HMRC as advance payments towards the subcontractor's tax bill. The deduction rates are:

These deductions are taken before your expenses are accounted for which is exactly why most subcontractors end up overpaying.

Why Do Construction Workers Overpay Tax Under CIS?

Business Expenses Are Not Deducted at Source
As a subcontractor, you have legitimate business costs, tools, materials, fuel, vehicle use, PPE, insurance, and more. CIS deductions do not take these into account. When you file a self-assessment return and claim your expenses, your actual taxable profit is lower, meaning you have overpaid.

Your Personal Allowance Is Ignored
Every UK individual has a tax-free Personal Allowance of £12,570 (2024/25). CIS deductions are applied to your gross income with no consideration of this allowance. If your total income is below or close to the threshold, you are almost certainly owed a refund.

You Are on the 30% Rate
If you are not registered under CIS, contractors deduct 30% from your payments. Registering brings this down to 20% immediately and you can reclaim the excess deductions for previous years.

What Expenses Can You Claim to Maximise Your Refund?

Claiming every allowable expense is the most effective way to increase your CIS refund. Typical claimable costs include:

• Tools, equipment, and plant hire
• Materials purchased for jobs (where not reimbursed by the contractor)
• Work clothing, PPE, and safety gear
• Vehicle costs — fuel, insurance, repairs, or mileage allowance
• Travel to temporary worksites
• Mobile phone (business use proportion)
• Insurance — public liability and professional indemnity
• Accountancy fees

Many construction workers significantly underestimate their expenses and receive a smaller refund than they deserve. Our team reviews every eligible cost to make sure nothing is missed.

How to Claim Your CIS Tax Refund

The process to claim overpaid CIS tax is straightforward when you have the right support:

• Register for Self Assessment with HMRC (if not already done)
• Collect CIS deduction statements from all contractors you worked for
• Record all allowable business expenses for the tax year
• Submit your Self Assessment tax return — including all CIS deductions paid
• HMRC calculates your true liability and issues a refund for the difference

Refunds are typically paid within 4–8 weeks of submission. You can also claim back up to four previous tax years so if you have never filed, there may be multiple years of overpayments to recover.

CIS Refund Claim Deadlines

The 2021/22 deadline is approaching fast. If you have not yet claimed for that year, contact us now before the window closes permanently.

How YRF Accountants Can Help

YRF Accountants are specialist accountants in Bolton and Manchester with deep expertise in CIS. We handle the entire process from HMRC registration and expense review to return submission and refund tracking. Our clients typically receive significantly more than if they filed alone, because we leave nothing on the table.
We also advise on Gross Payment Status applications, limited company CIS compliance, and year-round tax planning to keep your future liability as low as legally possible.

Frequently Asked Questions

How long does a CIS refund take?
HMRC typically processes CIS refunds within 4–8 weeks of a completed Self-Assessment submission.

Can I claim for previous years?
Yes — you can reclaim overpaid CIS tax for up to four previous tax years. Do not delay, as deadlines apply to each year.

Do I need an accountant to claim?
You can file yourself, but most subcontractors miss significant expense claims and receive a smaller refund. A specialist accountant ensures you claim the maximum you are legally entitled to.