CIS & Tax

CIS Refund — How to Claim Back Overpaid Tax as a Builder 2026

Updated July 2026 · 8 min read · BuilderLog Team

If you work as a CIS subcontractor, there’s a good chance HMRC owes you money. The 20% deduction from your labour payments is an advance payment of tax — and if your actual tax bill is lower than what was deducted, the difference is yours to claim back.

Why most builders are owed a refund

CIS deductions are calculated on your gross labour income — before expenses. But your actual tax is calculated on your profit — after expenses. The gap between those two figures is where your refund lives.

Example: You invoice £40,000 in labour over the year. Your contractor deducts 20% = £8,000 in CIS tax. But after claiming £12,000 in legitimate expenses (materials, mileage, skip hire, tools, insurance, CSCS), your taxable profit is £28,000. Your actual tax on £28,000 is roughly £3,100. HMRC already has £8,000 of your money. You’re owed £4,900 back.

How to claim your refund

What you need

Payment and deduction statements: Your contractor must give you one within 14 days of each tax month end. These show how much was deducted. Keep every single one.

Expense records: Receipts, mileage logs, invoices for skip hire, scaffolding, tools. The more you can prove, the bigger your refund.

Your UTR number: Required for filing.

How long does the refund take?

If you file online and everything is straightforward, HMRC typically processes refunds within 5–12 weeks. The refund goes directly to your bank account or as a cheque, depending on your preference.

File early in the tax year (April–September) and you’ll generally get your refund faster than filing in the January rush.

What if you haven’t filed previous years?

You can file returns for up to 4 previous tax years. If you’ve been having CIS deducted for years and never filed, you could be owed thousands in accumulated refunds. Contact HMRC or an accountant to get this sorted — the money doesn’t disappear, but you do need to file to trigger the refund.

How much could you be owed?

The size of your CIS refund depends on the gap between what was deducted and what you actually owe. Here are some typical scenarios:

Gross labour income	CIS deducted (20%)	Expenses claimed	Taxable profit	Actual tax	Refund
£30,000	£6,000	£8,000	£22,000	£1,886	£4,114
£40,000	£8,000	£12,000	£28,000	£3,086	£4,914
£50,000	£10,000	£15,000	£35,000	£4,486	£5,514

These are simplified estimates — actual figures depend on your full tax position, National Insurance, and any other income. But the pattern is clear: the more expenses you claim, the bigger your refund.

Using an accountant vs doing it yourself

Many builders use a CIS refund specialist or accountant. They typically charge 10–25% of your refund as their fee. If your refund is £5,000, that’s £500–£1,250 in fees. This is worth it if you’ve never filed before and have multiple years to catch up.

If your situation is straightforward — one trade, one set of expenses, CIS deductions from one or two contractors — you can file yourself through HMRC’s online portal. The figures from BuilderLog’s tax report give you exactly what you need for each box.

Don’t forget to claim expenses for previous years too

If you’re filing late returns for previous years, make sure you claim all your expenses for those years as well. Many builders filing catch-up returns enter their income and CIS deductions but forget to claim mileage, tools, skip hire, and insurance for those years. Every unclaimed expense reduces the refund you’re owed.