How you get CIS deductions back depends entirely on how your business is set up, and the two routes have almost nothing in common. A limited company reclaims through the payroll every month. A sole trader or partnership claims once a year through Self Assessment.
Most explanations online run the two together, which is why so many company directors spend a year waiting for a refund that was never going to arrive that way.
Limited companies: through the payroll, monthly
If you trade through a limited company, the CIS suffered on your invoices is offset against the PAYE and National Insurance your company owes.
You report the CIS suffered each month on the Employer Payment Summary, which is part of your RTI payroll submission. HMRC then reduces what you owe on your PAYE bill by that amount.
Three things follow from that:
- You need a live PAYE scheme. No payroll, nowhere to offset.
- The EPS has to be filed for the month, every month. Skip it and the offset does not happen, and it is not applied retrospectively without asking.
- If you suffer more CIS than your PAYE bill, the excess carries forward through the year.
At the end of the tax year, anything still unclaimed can be repaid to you or set against another tax the company owes. You have to ask for it. HMRC does not send it automatically.
One thing that catches directors out. You cannot reclaim company CIS on your personal Self Assessment. The deduction was suffered by the company, so it belongs to the company.
Sole traders and partnerships: through Self Assessment
If you are self employed, the CIS deducted from you goes on your tax return as tax already paid.
It is set against your income tax and Class 4 National Insurance for the year. Because 20% of turnover is usually more than a sole trader’s actual tax bill, this often produces a repayment rather than a liability.
You claim it on the return after the tax year ends, which means a deduction taken in April 2026 is not recovered until after 5 April 2027 at the earliest. That is a long time for your working capital to be somewhere else.
Payment and deduction statements
The statement is the evidence. Without it the claim is you telling HMRC a number.
Every contractor who deducts from you has to give you a statement within 14 days of the end of the tax month. It has to show:
- The contractor’s name and employer reference
- The tax month it covers
- Your name and UTR
- The gross amount, excluding VAT
- The cost of materials
- The amount deducted
If a contractor will not issue one, ask in writing and keep the request. If they still refuse, HMRC can be asked to confirm the deductions against the returns that contractor filed, but you are then relying on them having filed correctly.
Where the money actually goes missing
The unclaimed CIS we find on new clients is almost never one big missing amount. It is a gap between three sets of records that nobody reconciled.
- What your books say was deducted.
- What the statements you actually hold add up to.
- What HMRC has recorded from the contractors’ returns.
These three should match and frequently do not. A contractor files late or files you under a slightly different name and the deduction never lands on your record. Your bookkeeping picks up the net payment rather than the gross, so the deduction was never recorded at all.
Nobody chases this for you. HMRC pays out against what it holds, and if what it holds is short, you get less back and never find out why.
The rates, so the numbers make sense
| Status | Deducted from labour |
|---|---|
| Registered and verified | 20% |
| Not registered, or unmatched on verification | 30% |
| Gross payment status | Nothing |
The deduction is on labour only. Materials the subcontractor paid for come out first. There is more on this in CIS deduction rates.
If your compliance record is clean, gross payment status removes the reclaim problem entirely, because there is nothing to reclaim.
Questions we get asked
How do I claim a CIS refund?
A limited company claims by reporting CIS suffered on the Employer Payment Summary each month, offsetting it against PAYE. Any excess at the year end is repaid on request. A sole trader or partnership claims through Self Assessment after the tax year ends.
How long does a CIS refund take?
For a sole trader, usually a few weeks after the return is filed, provided HMRC’s record of your deductions matches your claim. Where the figures do not match it takes considerably longer, because HMRC checks it manually.
Can a limited company claim CIS back through Self Assessment?
No. Company deductions are recovered through the company’s PAYE scheme on the EPS. A director cannot claim company CIS on a personal return.
What is a CIS deduction statement?
The monthly statement a contractor must give you within 14 days of the end of the tax month, showing the gross amount, the materials cost and the amount deducted. It is your evidence for the claim.
What if a contractor will not give me a deduction statement?
Ask in writing and keep a copy. HMRC can confirm deductions from the returns that contractor filed, but only if they filed them correctly, so the written request matters.
What are the CIS deduction rates?
20% if you are registered and verified, 30% if you are not registered or cannot be matched, and nothing if you hold gross payment status. The deduction applies to labour, not materials.
If nobody has ever reconciled yours
There is a decent chance there is money sitting there. We reconcile CIS suffered against statements and against HMRC’s own record, and the difference is usually not nothing.
Have a look at how we handle CIS, or book a call.