How to Claim a CIS Tax Refund for the 2025/26 Tax Year

Subcontractors in the UK Construction Industry Scheme can reclaim overpaid tax deductions for the 2025/26 tax year starting from 6 April 2026. The process depends on whether you operate as a sole trader through Self Assessment or as a limited company offsetting liabilities against PAYE.

To claim your CIS tax refund for the 2025/26 tax year, you must submit your details to HMRC after the tax year ends on 5 April 2026. Sole traders must file a Self Assessment tax return online to reconcile their deductions. Limited companies must claim by offsetting their CIS deductions against their PAYE liabilities using GOV.UK services.

Key Takeaways

Reclaiming your construction tax deductions requires understanding your business structure, keeping accurate records, and meeting official HMRC submission windows.

• Sole traders and partnerships must claim their refunds exclusively by filing a Self Assessment tax return online.
• Limited companies must offset their CIS deductions against their PAYE liabilities using GOV.UK systems or direct written claims.
• The tax year ends on 5 April 2026, and the final online deadline to submit your Self Assessment is 31 January 2027.
• Refund payments are typically issued by HMRC within 14 to 56 days of successfully filing your tax return.

How do I claim CIS deductions back?

You claim your CIS deductions back by completing the appropriate annual HMRC tax filing based on your business structure.

According to official HMRC guidelines, contractors deduct tax at source at rates of either 20% for registered subcontractors or 30% for those unregistered. These payments are held as advance credits because the standard £12,570 personal allowance is not factored into monthly CIS payments. Once the tax year ends, HMRC calculates your actual liability and processes a refund for any surplus amount deducted.

What is the Construction Industry Scheme (CIS)?

The Construction Industry Scheme (CIS) is a UK tax mechanism where contractors deduct money from a subcontractor's payments to pass to HMRC.

These withheld funds are not final tax payments but are instead classified as advance payments on account. Under HMRC regulations, these deductions go directly towards matching the subcontractor's eventual Income Tax and National Insurance liabilities for the relevant financial year.

Are you a sole trader/partnership or a limited company?

Your legal business structure determines the specific recovery pathway you must follow to secure your CIS refund from HMRC.

Sole traders use the Self Assessment system to declare their income and claim back excess tax. Limited companies must use their payroll systems to subtract CIS deductions from their ongoing PAYE and NI liabilities throughout the year.

How sole traders and partnerships claim via Self Assessment?

Sole traders must submit a Self Assessment tax return online to claim their CIS refund after 5 April 2026.

According to the official HMRC SA150 Notes 2026, there is no alternative method for self-employed individuals to reclaim these deductions. You must report your gross earnings and total deductions to initiate the calculation.

1. Register: Sign up for Self Assessment on GOV.UK to obtain your Unique Taxpayer Reference (UTR) number.
2. Gather Records: Collect all monthly CIS payment and deduction statements alongside your business expense receipts.
3. File Online: Log into your Government Gateway account to input your gross pay, expenses, and total CIS deductions.
4. Submit: Send the completed return to HMRC online before the statutory deadline to prompt your automatic refund calculation.

How limited companies reclaim CIS deductions?

Limited companies reclaim CIS deductions by offsetting them against their PAYE liabilities using HMRC's dedicated online portals.

As outlined in the official GOV.UK guidance updated 6 April 2026, corporate subcontractors must request this offset online or in writing. You must provide your company name, PAYE reference, company UTR, and estimated overpayment details. All company PAYE, CIS, and Corporation Tax filings must be entirely up to date before HMRC will process the refund.

What allowable expenses can you claim to maximise your refund?

You can claim various business-related costs as allowable expenses to reduce your taxable profit and increase your refund.

Claiming legitimate costs lowers your net profit, which directly decreases the amount of tax you owe for the year. This adjustment allows you to reclaim a larger portion of the CIS deductions kept by your contractors.

• Purchase, hire, and repair costs for professional tools and safety equipment.
• Fuel costs, business travel mileage, and van upkeep expenses.
• Protective clothing, boots, and specialist PPE required for site work.
• Travel accommodation and subsistence costs when working away from home.
• Professional association memberships, training courses, and accountancy fees.

What are the CIS refund deadlines for 2025/26?

The deadlines for the 2025/26 tax year run from the year's end in April 2026 until January 2027.

Missing these key dates can result in automatic penalties or delays to your refund. Filing early is the most effective way to ensure your money is returned promptly by HMRC.

Does Making Tax Digital (MTD) affect my CIS refund from April 2026?

Making Tax Digital (MTD) will change how higher-earning subcontractors report their income starting from 6 April 2026.

If your gross income from self-employment exceeds £50,000, you must submit quarterly digital updates to HMRC. However, your CIS deductions will still be officially reconciled and refunded at the end of the year during the final verification process.

How long does it take HMRC to pay a CIS refund?

HMRC typically processes and pays out CIS refunds within 14 to 56 days after you successfully submit your online Self Assessment tax return.

Can I claim back CIS deductions if I lost my monthly statements?

Yes. You should contact the contractors who paid you to request duplicate statements, or access your HMRC digital tax account where these records are often stored.

Do I still need to file a final Self Assessment return under Making Tax Digital?

Yes. Subcontractors subject to MTD from 6 April 2026 must still complete a final end-of-year declaration to reconcile all CIS deductions and claim refunds.

What is the penalty if I miss the 31 January 2027 CIS deadline?

You will face an immediate £100 late-filing penalty from HMRC. This fine increases with daily charges and percentage-based penalties if the return remains outstanding.

Can a limited company offset CIS deductions against Corporation Tax directly?

No. Limited companies must offset their CIS deductions against their PAYE liabilities during the tax year rather than using them to directly pay Corporation Tax.