CIS Tax Rebate Calculator

Why CIS subcontractors nearly always overpay

The Construction Industry Scheme is a blunt instrument. When a contractor pays you, they withhold a flat 20% of the labour on your invoice (or 30% if you are not registered or could not be verified) and send it to HMRC as an advance payment against your tax. It comes off labour only — never materials or VAT.

That 20% takes no account of anything that actually decides your tax bill. It ignores your personal allowance, so the first £12,570 of profit that should have been taxed at nothing has still been hit at 20%. It ignores your expenses, so every roll of twin and earth, every litre of diesel, every insurance renewal and every set of test leads has been taxed as if it were profit in your pocket. And it ignores the fact that National Insurance for the self-employed is charged at 6%, not 20%.

Put those three together and the arithmetic almost always runs one way: the contractor has sent HMRC more of your money than HMRC is entitled to keep. The difference is your rebate. It is not a bonus, a windfall or a government grant — it is your own money coming back, and you get it by filing a Self Assessment return.

What the calculator is doing, step by step

1. Work out your turnover

Everything you invoiced in the tax year, before any CIS was taken off. That is your CIS labour, plus materials you recharged, plus any private or domestic work where no deduction was made. Turnover is the top line, not the money that landed in your bank.

2. Take off your expenses

Allowable business costs come off turnover to give your taxable profit. This is the number the whole calculation hangs on, and the number most sparks under-claim because they never kept the receipts.

3. Apply the personal allowance

The first £12,570 of profit is tax free. If your profit is over £100,000 the allowance tapers away by £1 for every £2 above that, and is gone entirely at £125,140 — the calculator handles that automatically.

4. Charge Income Tax on the rest

20% on the next £37,700 of taxable income, 40% above that up to £125,140, then 45%. Most solo electricians sit entirely in the basic-rate band.

5. Add Class 4 National Insurance

6% on profit between £12,570 and £50,270, then 2% on anything above £50,270. Class 2 is treated as paid once profits pass £7,105, so it costs you nothing and the calculator does not charge it.

6. Compare the two numbers

Total Income Tax plus Class 4 NI is what you owe. CIS withheld is what has already gone. The gap between them is your estimated refund — or, occasionally, a balance still to pay.

Worked example: a spark on £48,000 of labour

Say you are a registered subcontractor on 20%. Across the year you invoiced £48,000 of labour to contractors, recharged £6,000 of materials, and your allowable expenses — materials bought, van running costs, tools, test gear, insurance, phone, accountant — came to £11,500.

Note what happens if the same spark had never registered for CIS and was deducted at 30% instead. The tax bill is identical at £7,781.80, but £14,400 would have been withheld — so the refund jumps to £6,618.20. That is £6,618 of your working capital sat with HMRC for up to a year for no reason. If you are on 30%, registering is the single highest-value hour of admin available to you.

The expenses sparks most often forget

Every pound of legitimate expense you fail to claim is roughly 26p of refund you never see (20% tax plus 6% Class 4 NI). The usual misses:

• Materials you bought and recharged — the recharge is income, so the purchase must go in as a cost.
• Van costs — fuel, insurance, tax, servicing, tyres, MOT, or the simplified mileage rate if that suits you better. Pick one method, not both.
• Tools and test gear, including replacements, plus the annual calibration on your MFT.
• Scheme and trade costs — NICEIC or NAPIT registration, ECS card, Part P, CPD, trade body subscriptions.
• Insurance — public liability, professional indemnity, tools cover.
• Protective clothing and branded workwear.
• Phone and broadband, apportioned for business use, plus your quoting and invoicing software.
• Use of home as an office for the paperwork evenings, and accountancy fees.

What this calculator does not do

It is deliberately a back-of-the-van estimate, not a tax return. It assumes you are a sole trader with one trade and no other income. It does not handle:

• Payments on account. If your last bill was over £1,000, HMRC will already have taken instalments towards this year — which changes the cash you actually receive, even though the underlying liability is the same.
• Employment income taxed under PAYE, pensions, rental income or dividends alongside the self-employment.
• Student loan repayments, which are collected through Self Assessment and reduce a refund.
• Limited companies. A company does not reclaim CIS through Self Assessment — it offsets the deductions against its PAYE and CIS liabilities, or claims a repayment after the payroll year end. Different process entirely.
• Capital allowances on a van or big kit purchase, the trading allowance, marriage allowance, pension relief, or losses carried forward.
• Any tax year other than 2026/27.Rates and thresholds change; an earlier year has to be worked out on that year's figures.

How to actually claim it

You claim through Self Assessment. Register with HMRC by 5 October following the end of the tax year if you have never filed before. The tax year ends 5 April and you can file from 6 April — the online deadline is 31 January, which is also when any balance is due.

The critical piece of paper is the payment and deduction statement. Your contractor must give you one within 14 days of the end of each tax month, and it is your proof of every pound withheld. Keep the lot. If you have lost them, ask the contractor for copies before you file — HMRC will match your claim against what the contractor reported on their monthly returns, and a mismatch is the most common reason a refund stalls. File early: filing on 6 April rather than 31 January can put the money in your account the best part of ten months sooner.

Rates used (2026/27 tax year)

Keep reading

• CIS explained simply — the whole scheme in plain English, including gross payment status.
• CIS deduction calculator — what a single invoice pays out after CIS and VAT.
• CIS deductions for electricians — how it plays out job by job.