How much CIS refund can builders expect?

HMRC publishes no typical figure for a CIS refund. Your refund is what contractors deducted minus the Income Tax and Class 4 NI owed on your profit. The worked examples below show how it works for builders in 2026-27.

Under the Construction Industry Scheme (CIS), what a contractor takes off your pay is an advance payment towards your Income Tax and National Insurance. It is 20% of the labour part of your invoice if you are registered and verified, or 30% if not. Materials you bought for the job are not deducted from. Your real bill depends on your profit after costs, and the first £12,570 is covered by the personal allowance. The table works out four builders' years using 2026-27 rates, as published on GOV.UK.

Estimated refunds for builders in 2026-27

All examples assume a sole trader outside Scotland, with no other income and the full personal allowance. Costs include any materials the builder bought. Materials figures are what the materials cost: CIS 340 says only that direct cost comes off before the deduction, so any markup you add is deducted from like labour.

The rates used: Income Tax at 20% on profit between £12,571 and £50,270, and Class 4 National Insurance at 6% between £12,570 and £50,270. GOV.UK says that if your profits are £7,105 or more a year, Class 2 contributions are treated as having been paid, so Class 2 adds nothing here. This is an estimate based on the figures shown and the rules for 2026-27. Your actual figure may differ.

What pushes a builder's refund up or down

The per-£100 figures below apply while profit is between £12,570 and £50,270. Below £12,570 there is no Income Tax or Class 4 NI to save. Between £50,270 and £100,000 the combined rate is 42%, so each £100 of profit adds £42. Once your income passes £100,000, the personal allowance shrinks by £1 for every £2 over, so the rate is higher again; work those years out in full.

• Costs. Each £100 of allowable costs, such as van running costs, tools, fuel and phone, cuts the bill by £26: £20 Income Tax and £6 Class 4 NI.
• Materials. Supplying materials lowers the deduction, so less is waiting with HMRC. If the contractor in row two had taken 20% off the whole £48,000, it would have deducted £9,600.00, and the refund would be £5,848.20. The extra £3,000 comes back, but only after the year ends.
• Homeowner work. Each £100 of profit from homeowner jobs adds £26 to the bill with nothing deducted towards it. That is why row three owes.
• More CIS labour. Each extra £100 of pay adds £20 of deductions but £26 of tax and NI if your costs stay the same, so the refund shrinks by about £6.
• The 30% rate. It does not change your bill, so the extra 10% all comes back, as row four shows.

What this means for you

A labour-only builder at 20% will usually see a refund, because the personal allowance means the true bill is less than the deductions. The figure moves most with your costs and with how much homeowner work you take on. Keep receipts for everything you spend on the business, and show materials at cost separately on every invoice, with receipts, so the deduction stays on the labour.

Your 2026-27 refund is claimed on your tax return after 5 April 2027. Once you are in Making Tax Digital, HMRC adds your deductions to your MTD tax return and you request the refund separately through your HMRC online services account. Our guide on how to claim a CIS refund as a builder sets out each route.

Steps to estimate your own refund

1. Add up the gross pay and the deductions on every payment and deduction statement for the tax year.
2. Add any income from homeowners and other clients who paid you in full.
3. Total your allowable costs, including materials you bought, and take them off your total turnover to get your profit.
4. Take off the £12,570 personal allowance, then work out 20% Income Tax and 6% Class 4 NI on the rest. This only works while profit stays at or below £50,270; above that, Income Tax rises to 40% and Class 4 NI falls to 2%, so the shortcut overstates the refund.
5. Take that tax and NI away from your total deductions. A positive figure is your estimated refund; a negative one is tax to pay. If you repay a student or postgraduate loan through Self Assessment, that repayment is added to the bill too, so the refund is smaller.

When you might owe instead

If a good share of your work is for homeowners, the deductions may not cover your bill, as row three shows. You pay any balance by 31 January after the tax year. GOV.UK says you must also make payments on account towards the next year unless that bill was less than £1,000, or you paid more than 80% of the tax you owed outside Self Assessment. Other things can also cut what reaches your bank:

• Other income. Wages or rent use up your personal allowance first.
• Scottish taxpayers. Scotland has its own Income Tax bands, so these figures do not apply.
• Older tax debts. HMRC's manual says repayment is possible only where deductions exceed the Income Tax and Class 4 NI on the year's profits plus any still unpaid on profits for other years, usually earlier ones.
• Payments due soon. GOV.UK says you may not get a refund if you have tax due in the next 45 days.

Use the free MTD check to see whether Making Tax Digital applies to you from April 2027, and visit the trades section for more on CIS for builders.