Sole traders get their CIS deductions back through Self Assessment. Limited companies get them back through payroll. These are not two versions of the same process — they are entirely different mechanisms, and using the wrong one gets you a penalty.
That difference is also why company refunds take longer. Here is how each works and where each stalls.
Sole traders and partners: the Self Assessment route
At the end of the tax year you file your Self Assessment return as normal. On it you record:
- the full amounts on your invoices as income — the gross figure, before the contractor deducted anything
- any deductions contractors have made in the ‘CIS deductions’ field
HMRC works out your tax and National Insurance bill and takes off the deductions already made. If you still owe tax, you pay the balance by 31 January following the end of the tax year. If you have overpaid, HMRC pays the money back.
Two mistakes account for most problems here. The first is recording net invoice values as income, which understates turnover and produces a wrong tax computation. The second is not claiming the deductions at all, because the contractor’s statements were never filed.
Limited companies: the EPS route, not the CT600
If your company has CIS deductions taken from it, you claim them back through your company’s monthly payroll scheme. Do not try to claim them through your Corporation Tax return — you may get a penalty if you do.
GOV.UK states that plainly, and it is the single most common and most expensive error in CIS. The deductions were taken from the company, so they are set against the company’s PAYE liabilities, not its Corporation Tax.
The monthly process:
- Send your monthly Full Payment Submission to HMRC as usual.
- Also send an Employer Payment Summary, entering the total CIS deductions for the year to date.
- HMRC takes your CIS deductions off what you owe in PAYE tax and National Insurance. Pay the balance by the usual date.
If the company’s PAYE bill for the period is reduced to zero and there are still CIS deductions left over, carry them forward to the next month or quarter in the same tax year and tell HMRC in the EPS that you have nothing to pay.
Keep a record of amounts claimed back against your monthly or quarterly PAYE bill. You can use form CIS132 or your own records.
Why company refunds are slower
Four structural reasons, none of them about HMRC being slow.
1. The offset comes first. A company does not get a refund each month. It gets a reduction in what it pays. Only deductions that cannot be absorbed by the PAYE bill during the tax year become a repayment claim — and that claim is made after the year ends.
2. Every return has to be in. Since 6 April 2026, GOV.UK states that to claim a repayment you must have submitted all relevant PAYE, CIS and Corporation Tax returns. One outstanding CIS monthly return from eleven months ago stops the whole claim — a recent condition that much published guidance has not picked up.
3. Timing against 5 April. HMRC warns that if you submit your return before the filing deadline of 5 April, your records may not show all deductions for the previous tax year, which may cause delays or an incorrect payment. Claiming the moment the year turns is not faster.
4. Verification. You do not have to send supporting information with a claim unless you are claiming for the current year. Current-year claims should include the related payment and deduction statements and bank statements.
A sole trader’s refund is a line in a tax computation. A company’s refund is a reconciliation between three separate return streams.
Making the year-end repayment claim
| Detail | |
|---|---|
| Who can claim | A limited company subcontractor, or an agent of one, that has paid too much tax or National Insurance and submitted all relevant PAYE, CIS and Corporation Tax returns |
| What you need | Company name, telephone number and address; PAYE reference; company unique tax reference; estimated overpayment |
| To offset instead of repay | Corporation Tax UTR, VAT registration number or PAYE reference for whichever liability you want it set against |
| To be paid out | Bank or building society name, account number, sort code and account holder’s name |
| Online | Sign in with your Government Gateway user ID; agents use their agent services account |
| By post | A written request marked ‘CIS’ to PT Operations North East England, HM Revenue and Customs, BX9 1BX |
| Paying an agent | Form R38 or signed authority |
You can amend a claim if you have not included the full amount. Mark it ‘revised claim’, state the full amount claimed, and refer back to the original.
If HMRC thinks your claim is wrong
HMRC may ask you to provide evidence for your CIS deductions or to change your claim. If you do not respond by the deadline HMRC gives you, HMRC will correct your claim and you will not be able to make any more claims in that tax year.
You can appeal the decision, and HMRC will tell you how.
Common causes of delay
| Cause | Fix |
|---|---|
| An outstanding PAYE, CIS or Corporation Tax return | File the missing return before claiming |
| Claim submitted too early in April | Wait until your records show the full year’s deductions |
| Deductions do not match HMRC’s records | Reconcile your payment and deduction statements against contractors’ returns |
| Current-year claim with no supporting evidence | Include payment and deduction statements and bank statements |
| Company details do not match HMRC’s records | Check the PAYE reference and company UTR character by character |
| Claim made through the CT600 instead of the EPS | Withdraw and claim correctly — this route also risks a penalty |
| HMRC request for evidence not answered | Respond by the deadline, or lose the ability to claim for that tax year |
If you do not have all your CIS statements
Contractors must give you a payment and deduction statement within 14 days of the end of each tax month. If you have not received them all, ask the contractor for replacement copies.
If the contractor has stopped trading, write to HMRC at PT Operations, HM Revenue and Customs, BX9 1BX with your name, address and UTR, the contractor’s name, address and tax reference if you know it, the dates of the payments or the tax months in which you were paid, and why you do not have the statements.
If the company goes into administration or liquidation
The person managing the administration or liquidation should write to HMRC to ask for CIS deductions to be repaid straight away.
Frequently asked questions
How do I claim a CIS refund as a sole trader?
Through your Self Assessment tax return. Record the full amounts on your invoices as income and put any deductions contractors have made in the ‘CIS deductions’ field. HMRC works out your tax and National Insurance and takes off the deductions. If you have overpaid, HMRC pays the money back; if you still owe tax, pay it by 31 January.
How does a limited company claim CIS deductions back?
Through the company’s monthly payroll scheme, not the Corporation Tax return. Send your monthly Full Payment Submission as usual, then send an Employer Payment Summary entering the total CIS deductions for the year to date. HMRC takes those deductions off what you owe in PAYE tax and National Insurance.
Can I claim CIS deductions on my Corporation Tax return?
No. GOV.UK is explicit that you must claim them back through your company’s monthly payroll scheme and that you may get a penalty if you claim through your Corporation Tax return instead.
Why is my company CIS refund taking so long?
Company deductions are offset against the PAYE bill month by month first, so only the unabsorbed balance becomes a repayment claim after the year ends. Since 6 April 2026 you must also have submitted all relevant PAYE, CIS and Corporation Tax returns before HMRC will process a repayment.
What if I have not received all my CIS statements?
Ask the contractor for replacement copies. If the contractor has stopped trading, write to HMRC with your name, address and UTR, the contractor’s name, address and tax reference if you know it, the dates of the payments or the tax months you were paid, and the reason you do not have the statements.
Getting the money back on time
The company route only works if the monthly Employer Payment Summary carries the right year-to-date figure every single month. Miss that and the offset does not happen, the PAYE bill is overpaid, and the refund waits until after the tax year ends.
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