CIS Subcontractor Tax Return 2025/26: Complete Guide

The 2025 to 2026 tax year ran from 6 April 2025 to 5 April 2026. If you worked as a subcontractor under the Construction Industry Scheme in that year, this is the order to do the return in and the deadlines that apply to it. Our separate CIS refund guide goes deeper on the repayment itself.

What was deducted, and from what

The deduction is taken from the labour element only. Before applying the rate, the contractor takes out VAT, materials you paid for yourself, plant hire for the job, consumable stores and fuel other than for travelling, and the cost of manufacturing or prefabricating materials. If you cannot evidence what the materials cost, the contractor estimates it, and a low estimate means more was deducted than should have been. Itemise materials on your invoices and keep the receipts.

Step one: reconcile the statements

A contractor must give you a payment and deduction statement within 14 days of the end of each tax month. Tax months run from the 6th to the 5th, so the statement for 6 May to 5 June was due by 19 June. Each one shows the gross payment, the materials excluded and the amount deducted.

Lay them out month by month against your bank and your invoices for the whole year. Twelve months for each contractor you worked for. Any month without a statement is money you cannot evidence, so chase it now rather than in January. If a contractor has ceased trading, your invoices and bank records are the next best evidence, and HMRC will usually work with them, but it is a harder conversation.

Step two: the expenses

The test is whether the cost was incurred wholly and exclusively for the trade. For a subcontractor that normally covers:

• Tools, small plant and equipment, and replacement blades, bits and consumables.
• Protective clothing, safety boots, hard hats and branded workwear.
• Materials you paid for yourself.
• Plant and equipment hire, skips and waste disposal.
• Van running costs or mileage, parking, and public transport to temporary sites.
• Phone and data, and the business share of use of home for quoting and paperwork.
• Accountancy fees, trade subscriptions, bank charges and public liability cover you carry.
• CSCS cards, tickets and training that updates skills you already use.

Larger purchases such as a van, a mixer or power tools go through capital allowances, and the annual investment allowance normally brings the whole cost off in the year of purchase. A van qualifies for that allowance; a car does not and is written down instead.

For a vehicle you choose either the flat rate per mile or a business share of actual running costs with capital allowances, and not both for the same vehicle. From the 2026 to 2027 tax year the flat rate is 55p a mile for the first 10,000 business miles in a car or goods vehicle and 25p after that. For the 2025 to 2026 return the first band was 45p.

What is not claimable: ordinary commuting to one permanent site, everyday clothes, client entertaining, and fines of any kind.

Step three: the calculation

The return does this for you, but it is worth knowing where the number comes from.

• Gross income, including every CIS payment before deduction and any other work.
• Less allowable business costs, which gives taxable profit.
• Apply the personal allowance and the Income Tax rates.
• Add Class 4 National Insurance on the profit.
• Subtract the CIS deducted during the year, and any payments on account made.

If the deductions exceed the liability the difference is repaid. If they fall short you pay the balance. A repayment is the common outcome, because 20% is taken from turnover while tax is charged on profit after the personal allowance, but it is not automatic. Other income, a strong year, a student loan or the High Income Child Benefit Charge can absorb it. Nobody can promise you a refund before the figures are in, and nobody can promise when HMRC will pay one.

The deadlines for 2025/26

Filing late costs £100 immediately even if you are due a repayment, then £10 a day from three months up to £900, then 5% of the tax or £300 at six months and again at twelve. Late payment penalties are separate, at 5% of the unpaid tax at thirty days, six months and twelve months, with interest running from the day after the due date at 7.75% from 9 January 2026.

Filing early is worth real money here. A return filed in April or May rather than January means you know your position months before the payment date, and a repayment is in your hands far sooner.

If you work through a limited company

A company does not reclaim CIS deductions on a Self Assessment return. The deductions are set against the company's own PAYE, National Insurance, CIS and Corporation Tax liabilities through its payroll scheme, and any excess is repaid to the company after the tax year end. Putting company deductions on a personal return is a correction rather than a refund, so if you incorporated part way through the year the two periods have to be dealt with separately.

If you are behind

Deductions sitting with HMRC from earlier years are not lost, but there are time limits for claiming overpaid tax, so an old year is worth dealing with sooner. We quote a fixed fee per year, file in date order and deal with HMRC on the penalty position. Our CIS tax returns and refunds service page sets out the process, and the construction and CIS page covers how we work with trades through the year.