When can I claim a CIS refund?

When can I claim a CIS refund? 

If you work in construction under the Construction Industry Scheme (CIS), there is a good chance you have overpaid tax at some point. Contractors deduct tax from your pay before you receive it, often without taking your full personal allowance or expenses into account. 

A CIS refund allows you to reclaim that overpaid tax. Knowing when you can claim is important, as timing affects both how quickly you receive your money and which process you need to follow. 

This guide explains when you can claim a CIS refund, how the process works for different types of workers, and what to consider before submitting a claim. 

How do CIS deductions work? 

Under CIS, contractors deduct tax from payments made to subcontractors and pass it directly to HMRC. 

The standard deduction rates are: 

• 20% for registered subcontractors 
• 30% for subcontractors who are not registered 

These deductions are taken before you receive your pay. They do not automatically account for your personal allowance, allowable expenses, or other tax reliefs. As a result, many subcontractors end up paying more tax than they actually owe. 

A CIS refund allows you to recover that overpayment. 

When can you claim a CIS refund? 

In most cases, you can claim a CIS refund after the end of the tax year, which runs from 6 April to 5 April. 

However, some people can claim during the tax year, depending on their circumstances. 

The correct timing depends on: 

• Whether you are a sole trader or limited company 
• Whether you are still working under CIS 
• How much tax has been deducted compared to your actual liability 

Understanding which route applies to you can help you get your refund sooner and avoid delays. 

Claiming a CIS refund through Self Assessment 

For most sole traders, the standard way to claim a CIS refund is through a Self Assessment tax return. 

After the tax year ends on 5 April, you submit your return declaring: 

• Your total income 
• Allowable business expenses 
• CIS tax deductions shown on your statements 

HMRC then calculates how much tax you actually owe. If the deductions exceed your liability, a refund is issued. 

Online Self Assessment returns are usually processed more quickly, with refunds often paid within two to six weeks. Paper returns typically take longer. 

Can you claim a CIS refund during the tax year? 

In certain situations, you do not need to wait until the end of the tax year. 

You may be able to make an in-year CIS refund claim if: 

• You stop working in construction 
• Your CIS deductions significantly exceed your expected tax liability 

For individuals, this involves submitting form CIS40. 
For companies, form R38 may apply. 

HMRC will usually ask for supporting documents such as Payment and Deduction Statements and bank records. Processing times vary, but in-year claims can sometimes result in faster refunds. 

CIS refunds for sole traders 

If you are a sole trader, CIS refunds are normally claimed through your annual Self Assessment tax return. 

You report your income, expenses, and CIS deductions, and HMRC calculates whether you have overpaid tax. 

Refund amounts vary depending on your earnings and expenses, but they can be significant, particularly if you have high allowable costs. Keeping accurate records throughout the year makes the process smoother and reduces the risk of delays or queries. 

CIS refunds for limited companies 

Limited companies reclaim CIS deductions differently. 

Instead of claiming through Self Assessment, CIS deductions are offset against your company’s PAYE and National Insurance liabilities through your payroll submissions. 

Each month, you submit a Full Payment Submission and Employer Payment Summary to HMRC. If CIS deductions exceed what your company owes in PAYE and NICs, you can request a refund at the end of the tax year. 

Ensuring all PAYE and Corporation Tax obligations are up to date helps avoid delays. 

First-time CIS refund claims 

If you are new to CIS, your first refund may take longer. 

HMRC often carries out additional checks, which can include verifying your identity, registration status, and business records. Having your Unique Taxpayer Reference and all CIS statements ready can help speed things up. 

First-time delays are common and do not usually indicate a problem. 

Seasonal and cash flow considerations 

For many subcontractors, CIS refunds play an important role in managing cash flow. 

Some people prefer to wait until the end of the tax year to receive a larger refund, while others use in-year claims to improve cash flow during quieter periods. 

The right approach depends on your financial situation and future plans. If cash flow is tight, it may be worth exploring your options before the tax year ends. 

Common CIS refund delays 

CIS refunds can be delayed for several reasons, including: 

• Missing or incorrect CIS statements 
• Differences between your records and contractor submissions 
• Additional HMRC verification checks 
• Late or incomplete tax returns 

Keeping accurate records and submitting claims promptly reduces the risk of delays. 

Recent changes to CIS refund processes

HMRC is gradually moving towards more digital reporting under Making Tax Digital. Over time, this will change how Self Assessment and CIS reporting work. 

While the aim is to improve accuracy and reduce overpayments, transition periods can still cause delays. Staying informed helps ensure you claim your refund correctly and on time. 

How RIFT can help with your CIS refund 

Claiming a CIS refund does not have to be complicated. 

RIFT specialises in helping construction workers reclaim overpaid CIS tax. We handle the paperwork, communicate with HMRC, and keep you informed throughout the process. 

You can use our CIS refund calculator to get an estimate of what you may be owed, or speak to our team for support with your claim. 

CIS refund FAQs 

When is the earliest I can claim a CIS refund? 

Most people claim after the tax year ends on the 5th of April. Some can claim earlier if they stop working or qualify for an in-year refund. 

Do I have to wait until January to get my CIS refund? 

No. You can submit your tax return as soon as the tax year ends. You do not need to wait until the January deadline. 

How long does a CIS refund take? 

Online claims are often processed within two to six weeks, but times vary depending on checks and workload. 

Can I claim a CIS refund if I am still working? 

Usually, refunds are claimed after the tax year ends. In limited cases, in-year claims may be possible.