The Construction Industry Scheme (CIS) is a tax deduction programme operated by HM Revenue & Customs (HMRC) in the United Kingdom. If you work within the construction industry as a subcontractor — such as a builder, electrician, plumber, painter, or decorator — the contractor who pays you is legally required to deduct tax at source from your payments.
This tax deduction, typically 20% (or 30% if you are not registered with HMRC), is then paid directly to HMRC on your behalf. As a result, tax is effectively taken out of your income before you even receive it.
What Exactly is a CIS tax Rebate?
A CIS rebate is, in simple terms, a tax refund that eligible construction workers can claim.
Because the Construction Industry Scheme involves tax deductions being made in advance — often at higher rates than ultimately owed — many subcontractors end up overpaying tax throughout the year.
By completing a Self-Assessment tax return after the end of the tax year (which runs until 5 April), you can claim back the excess tax you’ve paid. This tax refund is known as your CIS rebate.
Why Are You Entitled to a CIS tax Rebate?
There are several key reasons why subcontractors in the construction industry are frequently eligible for a tax rebate:
- Tax Has Already Been Deducted: Contractors deduct tax before paying you, often at a flat 20% rate.
- Work-Related Expenses: You may have incurred allowable expenses — such as on tools, protective clothing, fuel, travel costs, and insurance — which can reduce your taxable income.
- Personal Allowance: Every UK taxpayer is entitled to a tax-free Personal Allowance, which is approximately £12,570. HMRC takes this into account when your tax return is processed.
Once HMRC evaluates your total income, allowable expenses, and personal allowance, it often becomes apparent that you have overpaid, meaning you are due a rebate.
Practical Example of a CIS tax Rebate
Let’s break it down:
- You earn £30,000 in total income across the tax year.
- Your contractor deducts £6,000 in tax (at the standard 20% rate).
- You have documented expenses totalling £3,000.
When you submit your Self-Assessment return, HMRC might determine that based on your expenses and allowance, you only owed £3,000 in tax. Since £6,000 was already paid through CIS deductions, HMRC will issue a refund of the £3,000 overpayment. That refund is your CIS tax rebate.
When Can You Claim Your CIS Rebate?
You can submit your tax return and claim your rebate after 5 April, which marks the end of the UK tax year.
The earlier you file your Self-Assessment — commonly in April, May, or June — the quicker HMRC can process your rebate and return the money to your account.
What Information Do You Need to Make a Claim?
To successfully claim your CIS rebate, you will need to gather a few important documents and details:
- CIS deduction statements from all contractors who paid you during the tax year.
- A comprehensive record of your allowable expenses (e.g., tools, fuel, travel, insurance, uniforms).
- Your Unique Taxpayer Reference (UTR) number.
Ensuring all your documents are accurate and organised will help speed up the process.
In Summary: Don’t Miss Out on Your CIS Tax Refund
If you’re a subcontractor working under the Construction Industry Scheme, it’s highly likely that you’re entitled to a CIS rebate. Since tax is deducted before you receive your pay and you often incur work-related expenses, your actual tax liability tends to be lower than the amount already paid.
Filing a Self-Assessment return gives you the opportunity to reclaim that overpaid tax and receive what you’re rightfully owed. With the potential to get thousands of pounds back, claiming your rebate is not just good practice — it’s smart financial planning.
So, gather your paperwork, file your return after 5 April, and make sure you claim every penny you’re entitled to.
Claim Your CIS Rebate with Confidence
At Accounting People, we make it easy for subcontractors in the construction industry to reclaim what they’re owed. Whether you need help filing your Self-Assessment or calculating your work-related expenses, our friendly team is here to support you every step of the way.
Book your free consultation today and let’s make sure you don’t leave money on the table.
👉 Get Started with Your CIS Rebate
📞 Or call us on 0333 023 1300
