If you work as a subcontractor in the building trade around Sevenoaks, Kemsing, Otford, Borough Green or Westerham, you’ll be used to seeing 20% taken off your invoices under the Construction Industry Scheme (CIS). What many tradespeople don’t realise is how often those deductions add up to more than the tax they actually owe. When that happens, HMRC owes you money, but you have to claim it.
At Coplestons we work with builders, plasterers, electricians, roofers and decorators across West Kent, so here’s how refunds work in plain English.
How CIS deductions work
Under CIS, a contractor paying you for construction work must check your status with HMRC and then deduct tax from the labour part of your invoice before paying you. The current rates are:
- 20% if you’re registered for CIS
- 30% if you’re not registered, or the contractor can’t verify you
- 0% if you hold gross payment status
Deductions are only taken from labour, not from materials you’ve supplied, VAT, or certain other costs. Your contractor should give you a payment and deduction statement each month showing what’s been taken. Keep every one of them.
These deductions aren’t an extra tax. They’re advance payments towards your Income Tax and National Insurance, or your company’s tax if you trade as a limited company.
Why so many subcontractors are owed money
The 20% is taken from your labour income before you’ve deducted any of your costs. Once you take off your van, fuel, tools, protective clothing, phone, insurance and other allowable expenses, and then your tax-free Personal Allowance, your real tax bill is often lower than what’s already been deducted. The gap is your refund.
That’s why it pays to keep good records of your business costs throughout the year, not just your payment statements.
Sole traders and partners: claiming through your tax return
If you’re self-employed, you claim back CIS deductions through your Self Assessment tax return. You enter your total CIS deductions for the year, and HMRC sets them against your tax and Class 4 National Insurance bill. Any overpayment is repaid to you.
The tax year runs from 6 April to 5 April. You can file your return as soon as the year has ended, so for 2025/26, from 6 April 2026. You don’t have to wait until the 31 January 2027 deadline. If you haven’t filed yet, it’s worth getting your return in now so any refund reaches you sooner. Repayments are normally made once HMRC has processed your return and checked the deductions against what your contractors reported.
If you’re new to self-employment, remember that you need to be registered for Self Assessment before you can file. The registration deadline for 2025/26 was 5 October 2026. If you missed it, register as soon as possible.
Limited companies: a different route
If you trade through a limited company, the process is different. You don’t use the Corporation Tax return. Instead:
- You report your CIS deductions each month through your company’s payroll, on the Employer Payment Summary (EPS).
- HMRC sets them against the PAYE and National Insurance the company owes.
- Any deductions left over can be carried forward within the same tax year.
- After the tax year ends, you can claim a refund of what’s left, or use it against other tax such as Corporation Tax or VAT.
HMRC needs all your payroll submissions, any CIS returns (if you’re also a contractor) and company tax returns to be up to date before it will process a claim. Missing filings are one of the most common reasons company CIS refunds get held up.
Could you get gross payment status?
If your business is well established, you might qualify to be paid without deductions. HMRC looks at your compliance record and whether you run the business through a bank account. It also applies a turnover test on your construction income, excluding VAT and materials. For a sole trader, this is at least £30,000 over the last 12 months. Gross status improves your cash flow, but you then need to put money aside for your own tax bill. HMRC can also withdraw it if you file or pay late.
Frequently asked questions
I’ve lost some of my payment and deduction statements. Can I still claim?
Ask your contractor for copies first, because they’re required to provide them. If that’s not possible, HMRC can sometimes check its own records, but this can slow down your refund.
How far back can I claim?
If you never filed returns for earlier years, there are time limits, generally four years. Limited companies can claim online for the past six tax years. If you think you’ve missed out, get in touch and we’ll check what can still be recovered.
Do I still need a tax return if my refund is small?
Yes. Self-employed subcontractors must file a return every year they’re registered for Self Assessment, and it’s the only way to get your deductions back.
Speak to your local CIS accountant
Coplestons is a friendly, long-standing practice based in Kemsing, near Sevenoaks. We know the local trades and keep things simple. We’ll sort out your records, prepare your return and make sure every legitimate expense is claimed. Have a look at our services, read more about us as accountants in Sevenoaks, or call us on 01732 762886 (Monday to Friday, 9am to 5pm). You can also get in touch online.
Correct as at 20 October 2026. This is general information, not personal advice.