If you're a subcontractor working under the Construction Industry Scheme (CIS), there's a good chance you may be due a tax refund when the 2024/25 tax year ends. This guide explains when to expect a refund, how it works, and what HMRC might do if they query your claim. --- 🔍 Why Many CIS Subcontractors Receive a Refund Under CIS, contractors deduct 20% tax from your payments before you receive them (or 30% if you’re not registered). These deductions are sent to HMRC and counted as advance tax payments. But often, the deductions taken exceed the actual tax you owe, because: You can claim the personal allowance (up to £12,570 for 2024/25) You may have had periods without income You can deduct business expenses (tools, materials, travel, phone, insurance, etc.) Once your tax return is submitted, HMRC compares your actual tax liability with what’s been deducted – and if you’ve overpaid, they’ll issue a refund. --- ✅ You’re Likely to Get a Refund If: You are a sole trader under CIS You’ve had allowable business expenses You worked part of the year or had gaps between jobs You were on the 20% CIS rate (not gross payment status) --- ⚠️ You Might Not Get a Refund If: You’re on gross payment status (nothing deducted at source) You have additional income that increases your tax bill (e.g. rental income) You operate through a limited company (refunds are handled via PAYE and not personal tax returns) --- 📤 How to Claim Your Refund 1. Complete a 2024/25 Self Assessment Tax Return (available from 6 April 2025) 2. Include your CIS deductions (from your monthly Payment and Deduction Statements) 3. List your business expenses 4. Submit by 31 January 2026 (earlier if you want your refund sooner) Once submitted, HMRC will process your return and calculate your refund. --- ⏱️ How Long Does HMRC Take to Issue a Refund? HMRC usually processes refunds within 1 to 4 weeks of submitting your tax return online. If your return is filed early in the tax year (from April onward), refunds are often quicker. If your claim is unusual or unusually large, it may trigger a review or delay. ✅ You can check the progress of your refund using your HMRC online account. --- ❗ What If HMRC Disagrees With Your CIS Claim? If HMRC has concerns about the amount of CIS tax you’ve claimed, they may: Request copies of your monthly CIS deduction statements (PDS forms) Compare your claims against contractor submissions (they match what your contractor has told them) Delay payment until they are satisfied Adjust your refund or open a compliance review if they believe deductions were overstated or expenses are not valid Common reasons for queries: Missing or inconsistent CIS statements Deductions that don’t match HMRC records High expenses without supporting documentation ✅ Keep good records and ask contractors for missing statements. We can help you respond to any HMRC enquiries. --- 📎 Top Tips ✅ Keep every PDS (Payment & Deduction Statement) from contractors – they’re your proof ✅ Log all business expenses with receipts or bank statements ✅ Avoid using cash where possible – traceable payments are easier to prove ✅ Speak to an accountant – they can help maximise your refund and avoid issues --- 👥 How We Can Help At Hawkins Accounts Ltd, we specialise in supporting CIS subcontractors. We’ll: Accurately prepare and submit your tax return Make sure all allowable expenses are claimed Deal with HMRC on your behalf if they query anything Help you track and claim your refund quickly 📞 Get in touch for a no-obligation quote — and let’s get your tax sorted the right way.
