What is the Construction Industry Scheme (CIS)?
CIS explained in plain English for tradespeople
The Construction Industry Scheme (CIS) is a government system that requires contractors to deduct 20% from subcontractor payments and send it directly to HMRC as advance tax. This sounds straightforward — but because the 20% is calculated on your gross income with no allowance for your personal tax-free allowance (£12,570) or your business expenses, almost every subcontractor ends up overpaying and is owed a rebate at the end of the tax year.
Why you are owed a rebate
The 20% CIS deduction ignores your £12,570 personal allowance and all allowable business expenses. After these are accounted for, your real tax liability is almost always less than what was deducted.
What expenses can you claim?
Tools, PPE, workwear, travel between job sites (45p/mile), business phone use, public liability insurance, accountancy fees, training costs and equipment hire are all allowable deductions.
How to claim your rebate
You claim via a Self Assessment tax return submitted to HMRC. Most subcontractors should file by 31 January each year. HMRC then calculates your rebate and pays it to your bank account.
Step-by-step: how your CIS rebate is calculated
Work out your gross income
Total all CIS payments received from contractors before any deductions during the tax year.
Deduct business expenses
Subtract all allowable expenses. Every pound reduces your taxable profit and increases your rebate.
Apply the personal allowance
The first £12,570 of profit is tax-free. Only income above this is taxed at 20% (or 40% above £50,270).
Compare to CIS deducted
Subtract your actual tax liability from total CIS deducted. The difference is your rebate.
Key dates and deadlines for CIS subcontractors
Tax year 2025/26
Runs from 6 April 2025 to 5 April 2026. Keep records of all CIS statements, receipts and expenses throughout the year.
Self Assessment deadline
Online returns must be filed by 31 January 2027 for the 2025/26 tax year. Paper returns are due 31 October 2026.
Register for Self Assessment
If you have not filed before, register with HMRC as soon as possible at gov.uk. Do not wait until January — the deadline is 5 October after the tax year ends.
Claim previous years
You can claim CIS rebates going back 4 tax years. If you have not filed for 2021/22, 2022/23, 2023/24 or 2024/25, you may still be owed thousands.
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