If you are a CIS subcontractor, you must file a self-assessment tax return every year. There is no exception. The self-assessment return is where you declare your income, claim your expenses, and reconcile the CIS deductions already taken from your payments. This guide walks through the process.
Why do CIS subcontractors need self-assessment?
CIS deductions are advance payments toward your tax bill, not the final settlement. HMRC does not know your full income, expenses, or personal allowances until you file a return. Self-assessment is how you tell HMRC your actual position for the year.
Under PAYE employment, your employer deducts the right amount of tax each period using your tax code. CIS is different. A flat deduction rate is taken from your labour income, with no regard for your total annual earnings, personal allowance, or allowable expenses.
At year end, you may have paid too much and get a refund, or too little and owe more. Self-assessment is the system that settles that up.
All CIS subcontractors, including sole traders, partnerships, and company directors receiving CIS deducted payments, must file self-assessment returns.
When do you register for self-assessment?
If you are new to CIS self-employment, register for self-assessment with HMRC by 5 October after the end of your first tax year. Missing that deadline means a penalty.
For example, if you started CIS work in September 2025, which is the 2025-26 tax year, you must register for self-assessment by 5 October 2026.
Register online through your HMRC Government Gateway account. Select “Register for Self Assessment” and follow the prompts. HMRC sends a Unique Taxpayer Reference (UTR) by post, which takes about 10 working days.
You cannot file a self-assessment return without a UTR.
What are the self-assessment deadlines?
The tax year runs from 6 April to 5 April. Self-assessment deadlines for each tax year are:
- 5 October: Register for self-assessment if you are new to it
- 31 October: Deadline to file a paper return
- 31 January: Deadline to file an online return and pay any tax owed
- 31 July: Payment on Account deadline, if HMRC asks for advance payments
The 31 January online deadline is the one most CIS workers use. Late filing penalties start at £100 immediately, then increase after 3 months, 6 months, and 12 months. Late payment interest also applies.
How do CIS deductions appear in the return?
In the self-assessment return, you declare all your income from construction work. You then enter your CIS deductions suffered in the right box. HMRC credits the deductions against your income tax and Class 4 NIC bill.
For sole traders, go to the self-employment section. Enter gross income from construction. Deduct allowable expenses, see CIS subcontractor expenses, to reach taxable profit. Then enter CIS deductions suffered under “tax deducted” in the tax calculation section.
For partnerships, each partner declares their share of partnership income on their own return.
For companies, the company files a Corporation Tax return (CT600), not a self-assessment return. CIS deductions suffered by the company appear on the CT600.
How do you know how much CIS was deducted?
Every contractor who paid you must have given you a CIS payment and deduction statement each time they paid you. Add up the deduction amounts shown on all statements for the tax year. That total is your CIS deductions suffered.
Keep all statements. HMRC checks your self-assessment figures against the monthly returns filed by the contractors who paid you. If the numbers do not match, HMRC will ask questions.
If you lost any statements, contact the contractors who paid you and ask for duplicates. They have to keep records for three years.
What if CIS deductions exceed the tax you owe?
If your CIS deductions are higher than your final income tax and NIC liability, HMRC refunds the difference. That usually happens when earnings are lower than expected, when you claim significant allowable expenses, or when you had gaps in work during the year.
HMRC usually processes online self-assessment refunds quickly, often within days of the return being processed. The refund goes straight to the bank account you provided in the return.
For more on claiming back overpaid deductions, see the CIS tax refund guide.
Payment on Account, what is it?
If your self-assessment tax bill is more than £1,000 and less than 80% was collected through deduction at source, HMRC asks you to make Payments on Account. These are advance payments toward next year’s tax bill.
Payments on Account are split in two, 31 January and 31 July. Each is 50% of the previous year’s tax bill.
CIS subcontractors with significant income often trigger Payments on Account. The first time it happens, it can feel like you are paying twice, one payment for the current year and one advance for next year, both in January. Budget for that.
Can you avoid self-assessment by using umbrella PAYE?
Yes. Umbrella contractors are PAYE employees. Their tax is deducted correctly each month. They do not need to file self-assessment unless they have other income. That is one reason some construction workers switch to an umbrella company, to remove the self-assessment duty entirely.
See the Construction Industry Scheme comparison for the full CIS versus umbrella PAYE picture.
Contact the CIS payroll service for help with self-assessment or with CIS compliance for your construction business.
Frequently Asked Questions
Do all CIS subcontractors have to file self-assessment?
Yes. All CIS subcontractors must file a self-assessment return. CIS deductions are advance payments, not the final settlement. Self-assessment reconciles your real tax liability with what was already deducted.
What are the self-assessment deadlines for CIS workers?
Register by 5 October if you are new. File paper returns by 31 October. File online and pay by 31 January. Payment on Account, if it applies, is due on 31 July.
How do CIS deductions appear in the self-assessment return?
In the self-employment section, enter gross income and deduct allowable expenses. Enter total CIS deductions suffered, from your payment and deduction statements, under “tax deducted.” HMRC credits that against your income tax and NIC bill.
What happens if my CIS deductions are more than the tax I owe?
HMRC refunds the difference. Online refunds to bank accounts are usually processed quickly. Put your bank details in the return.
What are Payments on Account for CIS subcontractors?
If your annual tax bill is more than £1,000 and less than 80% was collected through deductions, HMRC asks for advance payments toward next year’s bill. They are split 50/50 between 31 January and 31 July.
