Let’s talk straight.
If you’re a CIS subcontractor, you are almost certainly overpaying tax during the year.
That 20% coming off your gross pay? It’s not your final bill. It’s a blunt advance payment based on turnover — not profit.
And profit is what actually matters.
The CIS System Was Never Designed to Be Accurate
CIS deductions are calculated on the amount you’re paid for labour.
They don’t consider:
- Your mileage to site
- Your van repairs
- Your insurance
- Your training
- The tools you replace every few months
- Your phone bill
- Your accountant
All of that reduces your profit. But none of it reduces the 20% taken at source.
So what happens?
You overpay all year. Then you settle up through Self Assessment.
How Much Are We Talking?
Across the industry, typical CIS refunds regularly land between £2,000 and £3,000 per year for subcontractors working consistently.
That’s not a marketing number. It’s a reflection of how the system works.
£2k–£3k
Typical annual CIS refund
800k+
Active CIS subcontractors in the UK
Even if only half are due an average refund of £2,000, that’s hundreds of millions sitting temporarily with HMRC every year.
The real issue? Many subcontractors don’t get the full refund they’re entitled to.
The Hidden Problem: Missed Expenses
Here’s where it gets uncomfortable.
Most CIS workers don’t track everything properly. Not because they’re careless. Because they’re busy working.
When you’re on site at 7am, you’re not thinking about:
- Logging 42 miles to a temporary site
- Splitting your mobile bill between business and personal
- Recording that £68 spent on safety boots
- Tracking van servicing
- Separating materials from labour
So what happens in January? You try to remember.
And memory is expensive.
The 10 Expenses CIS Subcontractors Forget Most Often
If this list makes you pause, it’s probably costing you money.
Mileage to temporary sites
Not commuting to a permanent workplace — but site-to-site travel absolutely counts.
Small consumables
Drill bits, blades, fixings, PPE replacements — the stuff you buy without thinking.
Safety clothing and protective gear
Hi-vis, steel-toe boots, hard hats, gloves — anything you wear for site safety.
Van servicing, tyres and repairs
If your van is used for work, the running costs are deductible.
Tool replacement
Not just new purchases — replacing worn-out or broken tools counts too.
Public liability insurance
A business cost that many subcontractors forget to include.
Trade memberships or certification fees
CSCS, Gas Safe, NICEIC, trade body memberships — all allowable.
Mobile phone business usage
The business proportion of your phone bill is a legitimate claim.
Training courses required for your trade
Courses that maintain or update your existing skills for your current trade.
Accountancy fees
Yes — the cost of getting your tax done is itself a deductible expense.
The bottom line on expenses
Individually, these look small. Collectively, they can reduce your taxable profit by thousands. Which means they increase your refund by thousands.
Why Refunds Take So Long
Even when everything is done properly, CIS refunds don’t always move quickly. Here’s why:
1. HMRC Has to Match Everything
Your tax return must align with:
- Contractor CIS submissions
- Your UTR
- Your deduction statements
If there’s any mismatch — even minor — it triggers manual checks. Manual checks mean delay.
2. Refunds Are Flagged
Large refunds can trigger additional verification.
First-time claims? More checks.
Changes in income patterns? More checks.
Inconsistent figures? More checks.
The system is cautious.
3. Paper-Based Habits Slow Everything Down
If you’re still sending paperwork late, guessing totals, or submitting incomplete returns — you’re increasing the chances of a query.
Every query adds weeks.
The Real Cost of “Doing It Quickly”
Here’s the honest conversation.
When subcontractors file their own returns in a rush, they tend to:
- Round expenses down
- Leave things out
- Avoid claiming anything they’re unsure about
- Submit before reconciling CIS statements
That reduces your refund. Quietly. And permanently.
Once you submit, you’re locked in unless you amend.
Most don’t.
Where 123 Tax Actually Makes a Difference
We don’t just “file a return”.
We:
- Reconcile your CIS statements properly
- Review expense categories thoroughly
- Ask questions most people don’t ask
- Make sure your figures match HMRC’s records
- Submit cleanly to avoid avoidable delays
Think about it this way
If you’re doing it yourself and under-claiming £1,500–£3,000 a year, that’s not saving money. That’s paying too much tax. And over five years? That’s the cost of a van.
The Bigger Picture
CIS refunds aren’t a bonus. They’re your money being returned because the system is designed to over-collect during the year.
The difference between a rushed claim and a properly structured one can be significant.
Most subcontractors assume their refund is “whatever HMRC calculates”. It isn’t. It’s whatever your records support.
And if your records aren’t complete, your refund won’t be either.
Bottom Line
If you’re under CIS:
You’re likely owed money
You’re probably not claiming every allowable expense
Your refund might be smaller than it should be
Getting it right isn’t about pushing boundaries. It’s about claiming what you’re legally entitled to. And making sure you don’t leave money behind because you were too busy earning it.