How to File Your CIS Tax Return as a Subcontractor

To file a CIS tax return as a subcontractor, you complete a standard Self Assessment (form SA100) with the self-employment pages (SA103S or SA103F), declare your full construction income before any deduction, and enter the total tax your contractors withheld under the Construction Industry Scheme in the CIS deductions box. HMRC then calculates your income tax and Class 4 National Insurance, credits the deductions already paid on your behalf, and either refunds the overpayment or bills you for the shortfall.

Before You Start

You need to be registered with HMRC for both Self Assessment and CIS, and you need a Unique Taxpayer Reference (UTR). If you don’t have one, register as a new business for Self Assessment and select “working as a subcontractor” when prompted; HMRC will set up both records at once.¹ The UTR is a 10-digit number posted to you, usually within about 15 days.²

The UK tax year runs from 6 April to 5 April. For that 12-month window, pull together:

Every monthly payment and deduction statement (PDS) from each contractor. Each one shows the gross amount paid, materials deducted, the amount liable to deduction, and the tax withheld, along with your UTR and any verification number where the 30% higher rate was applied.³
Your National Insurance number.
Records of all business income, including any bank interest, rental income, or other non-construction earnings.
Expense records: tools, protective clothing, phone and internet, insurance, travel, office supplies, software, and any home-office costs.
P60 or payslips if you also had employment income during the year.

If a contractor has stopped trading and can’t supply replacement statements, write to HMRC with your name, address, UTR, the contractor’s details, the payment dates, and why the statements are missing. HMRC can check its own records to verify what was deducted.³

CIS is only deducted from the labour portion of each payment. Materials you paid for directly, VAT, equipment hire, and consumable stores are stripped out before the percentage is applied.⁴ The rate is 20% for registered subcontractors, 30% for unregistered ones, or 0% under gross payment status.

Which Forms to File

CIS subcontractors use the standard Self Assessment return, form SA100, together with the self-employment supplementary pages: SA103S for straightforward businesses or SA103F for more complex ones.⁵ Both are available through the HMRC online portal or as paper downloads. Online filing is the standard route because the system calculates your tax position automatically once you submit.

Entering Your CIS Deductions

This is the step that decides whether you get a refund. Enter the full amounts on your invoices as income (the gross figures, before any CIS deduction), then enter the total tax your contractors deducted across the year in the “CIS deductions” field. HMRC calculates your total income tax and National Insurance and then subtracts the deductions already paid on your behalf.³

Your deduction figures must match what your contractors reported to HMRC in their monthly returns. Any mismatch can delay processing or trigger an inquiry. Cross-check every PDS against your own invoices and bank receipts before you file.

Working Out What You Owe

Your taxable profit is business income minus allowable expenses. Common deductible costs for construction subcontractors include tools and equipment, protective clothing, phone and internet, insurance, business travel, office supplies, printing, and software.⁶ For vehicle use, HMRC’s approved mileage rates from 6 April 2026 are 55p per mile for the first 10,000 business miles and 25p thereafter, with an extra 5p per business passenger. Once you pick the mileage method for a vehicle, you stay on it for as long as that vehicle is in the business, and you need a log of each trip’s date, route, purpose, and distance. A proportion of household costs is deductible if you work from home.

Once your profit is set, tax is applied. For 2025–26, the personal allowance is £12,570. The basic rate is 20% on taxable income from £12,571 to £50,270, the higher rate 40% from £50,271 to £125,140, and the additional rate 45% above that.⁷ If adjusted net income tops £100,000, the personal allowance tapers by £1 for every £2 over the threshold and disappears at £125,140.

On top of income tax, you owe Class 4 National Insurance on profits above £12,570: 6% on profits up to £50,270 and 2% above. Class 2 (£3.50 per week) is treated as paid automatically once profits reach £6,845, protecting your state pension record. Below that, you can pay voluntary Class 2 to maintain the record.⁸

Deadlines

Paper returns must reach HMRC by 31 October after the end of the tax year. Online returns are due by 31 January. Any tax owed is also payable by 31 January.⁹

Penalties if You File or Pay Late

Late filing:

1 day late: £100 fixed penalty.
3 months late: daily penalties of £10, up to £900.
6 months late: an additional 5% of the tax due or £300, whichever is greater.
12 months late: another 5% or £300, whichever is greater.

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Late payment adds a 5% surcharge on tax unpaid at 30 days, a further 5% at 6 months, and another 5% at 12 months. Interest runs on the outstanding balance for the whole period.¹⁰

Refunds and Payments on Account

Many subcontractors overpay through the year, especially those on lower profits who have had 20% withheld all year but owe less than that once the personal allowance and expenses are applied. When HMRC confirms the overpayment, the refund goes directly to your bank account. GOV.UK doesn’t publish a fixed processing time, but returns filed well before January tend to move faster.³

If your Self Assessment bill (income tax plus Class 4 NI, after CIS deductions) is more than £1,000, HMRC will usually require payments on account toward the following year. Each one is 50% of the current year’s bill. The first is due on 31 January with your balancing payment; the second falls on 31 July. Payments on account don’t apply where at least 80% of your total tax was already collected at source. HMRC does not charge late payment penalties on overdue payments on account, but it does charge interest, currently running at 7.75%.

Keeping Your Records

Keep your business records for at least five years after the 31 January submission deadline for the year they relate to. Records for the 2025–26 return (due 31 January 2027) must be kept until 31 January 2032.¹¹ If HMRC opens an inquiry, keep everything until it closes even if that runs past five years.

Making Tax Digital From April 2026

From 6 April 2026, Making Tax Digital for Income Tax (MTD for ITSA) is mandatory for sole traders and landlords with qualifying income over £50,000 in the 2024–25 tax year.¹² CIS subcontractors above that threshold are in scope. You will need to keep digital records in compatible software and file quarterly updates within just over a month of each quarter’s end, followed by a year-end return. CIS deductions go into your quarterly submissions, and your software has to separate labour from materials because only labour is subject to deduction.

MTD does not change income tax filing or payment deadlines. HMRC will write to taxpayers who meet the threshold, but the responsibility to check and sign up in time is yours.¹² Below £50,000, you continue with Self Assessment as normal.

If You’re VAT Registered

The domestic reverse charge changes how you invoice, not how you file Self Assessment. You do not charge VAT on invoices where the customer is registered for both VAT and CIS, the work is within CIS, and the customer has not told you they are an end user or intermediary supplier.¹³ Issue the invoice without VAT and add a note that the reverse charge applies and the customer must account for the VAT. Confirm end-user status with your contractor before invoicing; getting it wrong means either undercharging VAT (your liability) or overcharging it (a problem for your customer).

1
GOV.UK. What You Must Do as a Construction Industry Scheme (CIS) Subcontractor – How to Register
2
GOV.UK. Find Your UTR Number
3
GOV.UK. What You Must Do as a Construction Industry Scheme (CIS) Subcontractor – Pay Tax and Claim Back Deductions
4
GOV.UK. Make Deductions and Pay Subcontractors
5
GOV.UK. Self Assessment Tax Return Forms
6
GOV.UK. Expenses if You’re Self-Employed – Office, Property and Equipment
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GOV.UK. Income Tax Rates and Personal Allowances
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GOV.UK. Self-Employed National Insurance Rates
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GOV.UK. Self Assessment Tax Returns – Deadlines
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GOV.UK. Self Assessment Tax Returns – Penalties
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GOV.UK. Business Records if You’re Self-Employed – How Long to Keep Your Records
12
GOV.UK. Find Out if and When You Need to Use Making Tax Digital for Income Tax
13
GOV.UK. Domestic Reverse Charge Procedure (VAT Notice 735)