CIS Tax Returns & Refunds
Specialist Construction Industry Scheme support for contractors and subcontractors — CIS registration, monthly returns, verification, and reclaiming the tax that is so often overpaid. Based in Reigate, serving Surrey, London and the UK.
What is the Construction Industry Scheme?
The Construction Industry Scheme (CIS) is HMRC's way of collecting tax at source in the construction sector. Under CIS, contractors deduct money from the payments they make to subcontractors and pass it to HMRC. Those deductions count as advance payments towards the subcontractor's income tax and National Insurance. CIS covers most construction work — site preparation, alterations, repairs, decorating and demolition — on permanent or temporary buildings and civil engineering works such as roads and bridges.
Getting CIS right matters on both sides: contractors face penalties for late or incorrect returns, while subcontractors frequently overpay and are owed a refund. We handle the scheme end to end so you stay compliant and keep hold of your cash.
Contractors vs subcontractors
A contractor is a business that pays subcontractors for construction work, or a business that spends a lot on construction even if that is not its main trade ("deemed contractors"). Contractors must register for CIS, verify subcontractors with HMRC, make the right deductions, file monthly returns, and issue payment and deduction statements.
A subcontractor carries out the work and is paid by a contractor. Many businesses are both — for example, a builder who is paid by a main contractor but also engages their own trades. If that is you, you must operate CIS as a contractor on the payments you make and have CIS deducted on the payments you receive. Our bookkeeping and payroll services keep both sides organised.
CIS deduction rates
The rate a contractor deducts depends on the subcontractor's status with HMRC:
| Subcontractor status | Deduction rate |
|---|---|
| Registered and verified with HMRC | 20% |
| Not registered / cannot be verified | 30% |
| Gross payment status | 0% |
Deductions are taken from the labour element only — the cost of materials, plant hire you are charged for, VAT and certain other items are excluded. Registering as a subcontractor to move from the 30% to the 20% rate is one of the quickest cash-flow wins we see.
Monthly CIS returns (CIS300)
Contractors must send HMRC a monthly CIS return (the CIS300) by the 19th of each month, reporting every subcontractor paid in the tax month to the 5th and the deductions made. You must also give each subcontractor a payment and deduction statement. Even a "nil" month may need a return. Miss the deadline and HMRC applies automatic penalties starting at £100 and escalating. We prepare and file your CIS returns on time and keep the records HMRC expects.
Claiming a CIS tax refund
Because CIS is deducted from gross labour before expenses, subcontractors very often pay more tax during the year than they actually owe. How you reclaim it depends on your structure:
- Sole traders and partnerships — the deductions are set against your tax bill on your Self Assessment return, and any excess is refunded, often a few weeks after filing.
- Limited companies — CIS deductions suffered are set off against your PAYE/CIS liabilities through the payroll, with any balance reclaimed after the tax year against corporation tax or repaid.
Filing promptly after 6 April is the simplest way to get a refund quickly. We make sure every deduction is captured so you claim back everything you are owed.
How we help with CIS
We support construction businesses across Surrey and the UK with CIS registration (as contractor, subcontractor or both), monthly verification and CIS300 returns, payment and deduction statements, gross payment status applications, and refund claims. For official guidance see GOV.UK: the Construction Industry Scheme, or talk to a local accountant in Reigate who understands the trade.
Frequently Asked Questions
What is the Construction Industry Scheme (CIS)? ▼
CIS is an HMRC scheme for the construction sector. Contractors deduct money from payments to subcontractors and pass it to HMRC as an advance towards the subcontractor’s tax and National Insurance. It applies to most construction work on buildings and civil engineering, with some exceptions.
What are the CIS deduction rates? ▼
Contractors deduct 20% from payments to subcontractors who are registered and verified with HMRC, 30% from those who are not registered or cannot be verified, and 0% for subcontractors with gross payment status. Deductions apply to labour, not to materials, VAT or certain other costs.
How do I claim a CIS tax refund? ▼
Subcontractors who are sole traders or in partnerships reclaim overpaid CIS deductions through their Self Assessment tax return — the deductions are set against the tax due, and any excess is refunded. Limited company subcontractors offset CIS deductions against their PAYE/CIS liabilities or claim a repayment after the tax year.
Do I need to register for CIS? ▼
Contractors must register before taking on subcontractors. Subcontractors are not legally required to register, but unregistered subcontractors suffer the higher 30% deduction instead of 20%, so registering almost always makes sense. Some businesses are both contractor and subcontractor and must register as both.
When are CIS returns due? ▼
Contractors must file a monthly CIS return (CIS300) to HMRC by the 19th of each month, covering the tax month to the 5th, and give each subcontractor a payment and deduction statement. Late returns attract automatic penalties starting at £100, so timely filing matters.
What is gross payment status? ▼
Gross payment status lets a subcontractor be paid in full with no CIS deduction, settling their tax through Self Assessment or corporation tax instead. To qualify you must pass HMRC’s business, turnover and compliance tests. It improves cash flow significantly and we can help you apply and stay compliant.
Get help with CIS
From CIS registration and monthly returns to claiming your refund — talk to us.