How long does a CIS refund take when HMRC is checking it?

Most CIS refunds process quickly once the company tax return or Employer Payment Summary reconciliation is submitted. Once HMRC flags the claim for a check, that changes.

There is no statutory deadline forcing HMRC to complete a CIS compliance review by a set date. In practice, straightforward checks resolve in weeks; those involving employment status or subcontractor verification issues can take considerably longer.

The refund is generally held until HMRC is satisfied the deductions claimed match the CIS returns and payment records it holds.

The Construction Industry Scheme is set out in Chapter 3 Part 3 Finance Act 2004 (opens in a new tab), which requires contractors to deduct tax from payments to subcontractors and pass it to HMRC.

The Income Tax (Construction Industry Scheme) Regulations 2005 set out the mechanics of monthly returns, deductions statements, and how a subcontractor company reclaims deductions suffered against its own liabilities.

Where HMRC has doubts about the figures, it uses its Schedule 36 Finance Act 2008 powers to request contracts, invoices, bank statements, and deduction statements before releasing a refund.

There is no equivalent to the VAT repayment supplement regime for CIS refunds, so there is less financial pressure on HMRC to move quickly, beyond the general duty to act within a reasonable time.

Keep every deduction statement from contractors you worked for during the year; gaps or mismatches are the most common reason a refund is queried.

Respond fully and promptly to any Schedule 36 notice. Partial or late responses extend the review and can trigger penalties in their own right.

If cash flow is tight while waiting, consider whether a time to pay arrangement or short-term facility is more realistic than assuming the refund will land on a normal timescale.

The direct cost is usually cash flow: a delayed refund ties up working capital your company may be relying on.

If the review escalates into a wider employment status or CIS compliance review, professional fees to manage the response can add up. Growth plan clients have free tax investigation insurance included to cover exactly this kind of enquiry — details at /fees.

Poor record-keeping that prolongs the check indirectly costs you in both delay and adviser time spent reconstructing missing paperwork.

Do not chase HMRC repeatedly without providing the requested evidence first; incomplete responses are the main cause of delay.

Do not assume silence means approval; ask for a written update if you have heard nothing after a reasonable period.

Do not submit a refund claim without reconciling it against your own CIS deduction statements first; mismatches are what trigger checks in the first place.