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You can claim that tax year's CIS deductions back early on form CIS40 before 5 April, or through your final tax return afterwards. If you stopped on 30 September 2026, either route works.
Under the Construction Industry Scheme (CIS), the deductions your contractors took are advance payments towards your tax and National Insurance. Stopping work does not cancel them. While you are trading, a sole trader can only claim them back through the tax return after the year ends. Once you stop, GOV.UK says you may be able to get a refund of the deductions taken so far that tax year, using the sole trader claim form.
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The two routes compared
| Form CIS40, in-year | Final tax return | |
|---|---|---|
| When you can use it | After you stop, up to 5 April of that tax year | From 6 April after the tax year ends |
| How you claim | Online, or print and post the form | Self Assessment return, with deductions in the CIS box |
| Personal allowance | May be only part of it, depending on how long you traded and whether you took a job | The full year's allowance, counted against all your income |
| Conditions | Your tax affairs must be up to date | The usual return rules |
| If HMRC refuses | No right of appeal, but you can still claim on your final return | HMRC's decision can be appealed |
| Still need a tax return | Yes | This is the return |
HMRC's manual gives an example of how it shares out the allowance for an in-year claim. If you stopped on 30 September, it gives you half the year's allowances against your CIS income. If you went into a job, most of the allowance normally goes against your wages through PAYE. So a CIS40 can repay part of your money sooner, and the tax return settles the rest.
What this means for you
If you have stopped for good and the deductions are a meaningful sum, a CIS40 claim can get some of it back months earlier than waiting for 6 April. It is worth doing if your tax affairs are up to date, because HMRC checks that before it repays. If you are behind with earlier returns, file those first.
If you stopped late in the tax year, the gain from a CIS40 is small, and claiming through the final return may be simpler. Either way, the final tax return is still required, and it is where your full allowance, costs and any CIS40 repayment are brought together.
Partners claim on form CIS41, and every other partner must sign their agreement. A limited company that is liquidated or goes into administration can claim a refund of that year's deductions too, through its own route.
Steps to take when you stop
- Tell HMRC you have stopped self-employment, using its online service.
- Call the CIS helpline as soon as possible to say you have stopped as a subcontractor. GOV.UK says registered subcontractors must do this.
- Collect every payment and deduction statement from 6 April up to your last payment.
- Work out your profit to the date you stopped, including closing costs such as phone and postage, and any balancing charge if you sold your van or tools.
- If it is still the same tax year, claim the deductions on form CIS40 online or by post.
- After 5 April, file your final Self Assessment tax return for the year, including the CIS deductions and any CIS40 repayment you received.
- Keep the statements and your records in case HMRC asks for evidence.
Things to watch
- Selling equipment. If you sell a van or tools you claimed capital allowances on, a balancing charge may add to your final profit. GOV.UK lists this among the things to work out on your final return.
- Coming back later. If you restart, you will usually need to register for CIS again if your business structure has changed, for example from sole trader to company.
- VAT. If you were VAT-registered, you must cancel the registration.
Use the free MTD check to see where you stand on Making Tax Digital, and visit the trades section for more on CIS.
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Questions people ask
Do I lose my CIS deductions if I stop working?
No. They are advance payments towards your tax and National Insurance, held by HMRC against your name. You get any excess back either through form CIS40 during the tax year or through your final tax return after it.
What is form CIS40?
It is HMRC's claim for repayment of subcontractor deductions by a sole trader during the tax year. You can claim online or print and post the form. Partners use form CIS41 instead, with the other partners' written agreement.
Can I use CIS40 after 5 April?
No. HMRC's manual says no in-year repayment can be made after the end of the tax year the deductions were made in. After 5 April, you claim through your tax return.
I stopped trading and took a job. Does that change anything?
It can. HMRC's manual says that where someone stops self-employment and starts employment, most of the personal allowance normally goes against the job, so an in-year CIS refund may only include part of it.
Do I still need to file a tax return?
Yes. GOV.UK says you must send a final Self Assessment tax return by the deadline for the year you stopped trading. A CIS40 repayment does not replace it.
Sources
- What you must do as a CIS subcontractor: Pay tax and claim back deductions (GOV.UK)
- Claim repayment of subcontractor deductions, form CIS40 (GOV.UK)
- CISR75030: SA subcontractors, claims for in-year repayment (HMRC manual)
- SAM110100: In-year repayments to subcontractors (HMRC manual)
- Stop being self-employed (GOV.UK)
- What you must do as a CIS subcontractor: Changes you need to report (GOV.UK)
This is general information to help you understand the rules. It isn't tailored to your circumstances, so check your own position before acting on it.
Righto Tax is a trading name of NJG Consultancy Ltd, registered in England and Wales, company number 16095900. Registered office: Jubilee House, East Beach, Lytham St Annes, FY8 5FT.
All CIS guides for subcontractors
What happens next
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- Questions about this page? Email hello@rightotax.co.uk.