CIS Tax Refund Estimator 2026/27
Under CIS, contractors deduct tax from your payments before you receive them — 20% if you're registered with HMRC, 30% if unregistered. In most cases, more tax is deducted than you actually owe and the difference is your CIS tax refund.
Your actual tax liability is based on profit (payments minus allowable expenses). Expenses available to construction subcontractors are often substantial: materials, van costs, tools, PPE, accommodation when working away, phone, and professional fees. Claiming all legitimate expenses maximises your refund.
CIS Tax Refund Calculator: How Much Can Construction Workers Claim Back?
Construction workers on the Construction Industry Scheme (CIS) often overpay tax by thousands of pounds each year. Contractors deduct 20% (or 30% if not registered) from your payments and pass it to HMRC. But this deduction is calculated on your gross pay — not your profit after expenses. Most CIS subcontractors are due a significant tax refund.
Why CIS subcontractors get refunds
The 20% CIS deduction is an advance payment towards your tax bill — it is not your final tax liability. Your actual tax is calculated on your profit (income minus expenses), and most construction workers have substantial expenses. Materials, tools, vehicle costs, protective clothing, training, and insurance can easily total thousands of pounds per year.
For example, a plumber on CIS earning £40,000 gross would have £8,000 deducted by contractors. But after £8,500 of business expenses, their taxable profit is only £31,500. Their actual Income Tax plus NICs totals approximately £5,500 — meaning they are due a refund of £2,500.
Common CIS expenses to claim
- Materials and supplies: Copper pipe, fittings, cable, timber, fixings — keep all receipts
- Tools and equipment: Power tools, hand tools, ladders, safety equipment
- Vehicle costs: Mileage at 55p/25p per mile, or actual fuel, insurance, servicing apportioned for business
- Protective clothing: Hard hats, safety boots, hi-vis, goggles, gloves
- Training and certification: CSCS cards, NVQs, gas safe, first aid
- Insurance: Public liability, tool insurance, vehicle business use
- Accommodation: Hotel costs when working away from home
- Phone and internet: Business proportion of bills
- Accountancy fees: Cost of preparing your tax return
Track your expenses throughout the year with our free CIS Expense Tracker spreadsheet. Read our complete CIS tax refund guide for step-by-step instructions on claiming your money back from HMRC.
How CIS Tax Refunds Work
Under the Construction Industry Scheme (CIS), contractors deduct tax from payments to subcontractors and pass it directly to HMRC. These deductions act as advance payments toward your final tax bill.
- Registered subcontractors — 20% deducted from gross payments
- Unregistered subcontractors — 30% deducted from gross payments
- At tax year end, you file a Self Assessment tax return
- HMRC calculates your actual tax liability based on profit (income minus expenses)
- If CIS deductions exceed your tax liability, you receive a refund
- If your tax liability exceeds CIS deductions, you owe additional tax
Most CIS subcontractors receive a refund because the flat 20% or 30% deduction rate is often higher than the actual effective tax rate after expenses and the Personal Allowance are applied.
Frequently Asked Questions
How much CIS tax can I claim back?
What is the difference between 20% and 30% CIS deductions?
What expenses can I claim as a CIS subcontractor?
When will I get my CIS tax refund?
Do I need to register for Self Assessment as a CIS subcontractor?
How do I register for CIS?
Sources & Methodology
- HMRC: Construction Industry Scheme (CIS) Overview
- HMRC: CIS Deductions Technical Guide
- HMRC: Income Tax Rates and Allowances 2026/27
- HMRC: Self-Employed National Insurance Rates
All calculations are verified against official HMRC thresholds and rates for the 2026/27 tax year. Class 2 NIC is £3.45/week (£179.40/year) for profits above £6,725. Class 4 NIC is 6% on profits between £12,570 and £50,270, and 2% above. Calculations are for guidance only — consult a qualified accountant for personalised advice.
What You Should Do Next
- Register for CIS — If you're on 30% deductions, register immediately to drop to 20%. Register on Gov.uk.
- Keep detailed expense records — Every receipt increases your refund. Use a dedicated business bank account and apps like Receipt Bank or Expensify.
- File your Self Assessment early — Don't wait until January. Filing early means getting your refund sooner. Use HMRC's free online service or an accountant.
- Consider the VAT Flat Rate Scheme — If your taxable turnover is £150,000 or less, the VAT Flat Rate Scheme can simplify your VAT returns. Try our VAT Calculator.