CIS tax rebate calculator

If you work under the Construction Industry Scheme, your contractor takes tax off your pay before you see it — usually 20%. That deduction ignores your personal allowance and every expense you have, so most subcontractors have paid too much by the end of the year. This works out roughly how much of it should come back.

Why CIS subcontractors are usually owed money

A contractor deducting CIS tax is not working out what you owe. They apply a flat percentage to the labour part of your invoice and send it to HMRC as an advance payment against your bill.

• 20% is deducted if you are registered under CIS, 30% if you are not, and nothing if you hold gross payment status.
• The deduction is taken from labour only. Materials, consumables, fuel used on the job, third-party plant hire and VAT are stripped out first.
• Nothing in that calculation accounts for your personal allowance — the first £12,570 of profit that is taxed at 0%. That alone is usually worth more than £2,500 back.
• Nor does it account for your expenses. Every allowable cost reduces the profit you are taxed on.

You reclaim the difference by filing a Self Assessment return. As a CIS subcontractor you are self-employed, so you have to file one anyway.

Expenses worth claiming

This is where most refunds are won or lost. If you leave the expenses box at zero, you are almost certainly understating your refund. Costs you pay for yourself, wholly for the job, usually qualify:

• Tools and equipment, including replacing and repairing them.
• Protective clothing and boots, and the cost of washing specialist workwear.
• Travel between sites and to temporary workplaces — but not ordinary commuting to one permanent site.
• Public liability insurance and trade subscriptions.
• Phone, admin and accountancy fees, to the extent they are for the business.
• Use of home for quoting, invoicing and paperwork.

Keep the receipts. HMRC can ask you to show how a figure was arrived at, and "roughly" is not a defence.

What this estimate leaves out

An estimate is only useful if you know where it stops. This calculator covers income tax and self-employed National Insurance on a single CIS trade, and nothing else.

• It assumes CIS is your only income for the year. A separate PAYE job, rental income, dividends or savings interest will all move the real figure.
• It ignores student loan repayments, which are collected through Self Assessment and will reduce what you get back.
• It ignores payments on account — advance payments towards next year's bill that HMRC may add to your statement.
• It assumes a full year of trading and no losses carried in from an earlier year.

This is an estimate, not a tax calculation, and not tax advice. Your Self Assessment return is what determines the real figure. See the terms page for the full disclaimer.

How to claim it

You claim by filing your Self Assessment return for the tax year, putting your CIS deductions in the box for tax already deducted. HMRC offsets them against your bill and repays the difference.

• Register for Self Assessment if you have not already — the deadline is 5 October after the end of the tax year.
• File by 31 January after the end of the tax year if you file online.
• Check your CIS records against the monthly statements your contractor must give you.

You have four years. A repayment claim must reach HMRC within four years of the end of the tax year it relates to, so the oldest year in the calculator is the one to deal with first.

Not a CIS subcontractor?

If you are employed and taxed through PAYE rather than CIS, use the main tax refund calculator instead — it works out overpaid income tax for employees across the last four tax years.