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Self Assessment

Claiming Back Overpaid CIS Tax

5 min read · Reviewed 11 Sep 2026

CIS subcontractors commonly have more deducted during the year than they actually owe, because the deduction is taken from gross payments without allowing for expenses or the Personal Allowance. This guide explains why that happens and how the overpayment is reconciled through Self Assessment.

Why CIS subcontractors commonly overpay through the year

A CIS deduction is calculated on the labour part of each payment, at a flat rate, with no allowance for the subcontractor's business expenses, their Personal Allowance, or any other income tax reliefs they may be entitled to.

Because of this, the total CIS deducted over a tax year is often more than the subcontractor's actual Income Tax and National Insurance liability once their full picture, including expenses and the Personal Allowance, is taken into account.

This guide explains why the gap between CIS deducted and tax actually owed commonly arises. It does not advise on when or whether to make a claim.

How Self Assessment reconciliation works

A CIS subcontractor reports their construction income and expenses on their Self Assessment tax return, in the same way as any other self-employed person, working out their actual profit for the year.

Income Tax and Class 4 National Insurance are then calculated on that actual profit, after the Personal Allowance and any other reliefs due. The CIS tax already deducted by contractors during the year is then set against that calculated liability.

Example reconciliation
CIS tax deducted during the year
£4,000
Actual Income Tax and Class 4 NI owed for the year
£2,600
Amount refunded through Self Assessment
£1,400

If the CIS tax deducted is more than the amount actually owed, the difference is refunded. If it is less, the subcontractor pays the balance in the normal way.

What is needed to claim

  • A completed Self Assessment tax return for the relevant tax year, including the self-employment pages.
  • Records of income and expenses for the year, to work out the actual profit figure.
  • CIS deduction statements from each contractor, showing how much was deducted and when.

HMRC processes the reconciliation, and any refund due, once the Self Assessment return has been submitted and any tax owed by the subcontractor for the year has been accounted for.

Official sources

GOV.UK sources used in this guide

Key takeaways

  • CIS deductions are taken at a flat rate on gross labour payments, without allowing for expenses or the Personal Allowance.
  • This commonly means more is deducted during the year than the subcontractor actually owes.
  • The actual amount owed is worked out through Self Assessment, using the subcontractor's real profit for the year.
  • CIS tax already deducted is set against that amount; any excess is refunded, any shortfall is paid.
  • This guide explains how the reconciliation works, without advising on timing or whether to claim.

Frequently asked questions

Does every CIS subcontractor get money back?
Not necessarily. It depends on the subcontractor's actual profit, expenses and other income for the year compared with the CIS tax already deducted.
When is the reconciliation worked out?
It happens through the subcontractor's Self Assessment tax return for the relevant tax year, alongside their other Income Tax and National Insurance calculations.
What records should a CIS subcontractor keep?
Income and expense records to support the profit figure on the return, and the CIS deduction statements given by each contractor for the payments made.

Last reviewed

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This guide explains, in general terms, why CIS subcontractors commonly overpay tax during the year and how this is reconciled through Self Assessment. It is not personal tax advice and does not advise on the timing of a claim. Check current guidance for your situation.