CIS self-assessment: Your complete guide to CIS tax and refunds

If you work as a subcontractor, you already know CIS tax can take a big bite out of your pay. Your contractor takes the tax off before the money even reaches your account, which can leave you feeling short month after month.

The good news is that most people end up due a CIS tax refund once they do their CIS self assessment.

This guide breaks down what CIS tax actually is, how CIS deductions work, and how to do a CIS tax return without the stress. Think of it like having a mate on site who knows how HMRC works and wants to help you keep more of your own money.

What is CIS and how does it work?

CIS tax is HMRC’s way of collecting tax from the construction industry throughout the year, instead of waiting until your return is filed.

If you’re a CIS subcontractor, your contractor takes tax off each payment and sends it straight to HMRC. It’s supposed to make life easier, but in reality it often means money leaves your payslip long before it needs to.

Most subcontractors have expenses and a personal allowance that CIS deductions simply don’t consider. So even if 20% disappears from your pay, that doesn’t mean you owe 20% in tax. That’s why your CIS tax return exists: to balance the books and show HMRC your real tax position.

If you’ve ever wondered what CIS tax is, it’s basically a system that tries to stay ahead of your tax bill. But because of the way construction work varies, it usually ends up taking too much.

And if you’re a CIS contractor, your job is to verify your subcontractors and take the right amount of CIS deductions from their pay. It’s not the most glamorous part of the job, but it keeps everything compliant.

Do you need to file a CIS tax return?

Yes, if you’ve earned money as a CIS subcontractor. Your CIS self assessment is how you tell HMRC what you earned, what you spent and how much CIS tax has already been taken.

You’ll need a few things ready:

• Your UTR
• All your CIS statements
• Your invoices
• Records of mileage and travel
• Receipts for tools, PPE and gear
• Accommodation costs

Any other work-related expenses
Your CIS self assessment compares the tax you should’ve paid with the CIS deductions already taken. If the numbers don’t match, you get a CIS tax refund. Simple.

File by 31 January to avoid penalties. And if you’re unsure how to do a CIS tax return, don’t stress. Most subcontractors feel the same way. That’s why we help thousands of people do theirs each year.

CIS deductions explained

CIS deductions come in three types. Each one affects your pay in a different way.

Net payment status at 20%

If you’re registered for CIS, contractors usually deduct 20% from your labour costs. It’s common, but it rarely reflects your actual tax bill. That’s why many subcontractors end up due a CIS tax rebate when they claim their expenses.

Gross payment status at 0%

With gross payment status, no CIS tax is taken at all. You get paid in full and sort everything through your CIS tax return. Brilliant for cash flow, but HMRC expects you to stay compliant and keep your records clean. If not, they may move you back to 20%.

Not registered at 30%

If you’re not registered for CIS, contractors must take 30% from your pay. It’s a painful hit, and it’s a solid reason to get registered early.

What you can claim on your CIS tax return

Your expenses can make a huge difference to your refund. Some of the most common claims include:

• Mileage and fuel
• Public transport
• Parking and tolls
• Tools, uniform and PPE
• Phone costs (work use)
• Accommodation for overnight jobs
• Trade insurance
• Accountancy fees

These reduce the amount of tax you actually owe, which is why a CIS tax refund is so common among subcontractors.

How to complete your CIS self assessment

Here’s a simple walkthrough for your CIS tax return:

1. Sign in to HMRC
2. Enter your income for the year
3. Add every CIS deduction from your CIS statements
4. Enter your allowable expenses
5. Check the totals and see if you owe tax or if HMRC owes you
6. Submit your CIS self assessment
7. Wait for HMRC to process it. Timings vary, and delays aren’t unusual

This is usually the point where subcontractors realise something’s missing, like CIS statements or receipts. Don’t worry if that’s you. You’re not expected to know this stuff off by heart. We deal with CIS tax returns every day and can help you get it right.

Common CIS tax mistakes to avoid

A few mistakes pop up again and again:

• Missing CIS statements
• Entering the wrong income
• Forgetting to claim expenses
• Filing late
• Mixing up PAYE and CIS income
• Entering sales instead of labour-only income
• Misunderstanding gross payment status rules

Dodging these mistakes makes the whole process smoother and can even increase your CIS tax rebate.

CIS tax refunds: how to get your money back

Most subcontractors overpay CIS tax because deductions don’t match their real tax position. Once you file your CIS tax return, HMRC checks what you should’ve paid and what you’ve already paid through CIS deductions.

If you’ve overpaid, you’ll get a CIS tax refund. It really is that straightforward.

A CIS tax rebate can come from:

• CIS deductions taken at source
• Expenses you’ve claimed
• Weeks you didn’t work
• Switching between CIS and PAYE
• Tools and travel costs

If you want a quick idea of what you’re owed, try our CIS tax calculator. It gives you a fast estimate without the jargon.