How Do I Correct a Mistake on a CIS Return

At Towerstone Accountants we provide specialist CIS accountancy services for contractors, subcontractors, and construction businesses across the UK. We created this webpage for people working in construction who want clear guidance on CIS deductions, refunds, verification, and monthly return responsibilities, without jargon. Our aim is to help you stay compliant with HMRC, avoid penalties, and keep your cash flow and records under control.

Making a mistake on a CIS return is far more common than most contractors realise. CIS reporting is detailed, time sensitive, and often completed under pressure at the end of a busy month. I regularly work with contractors who only discover an error weeks or even months later, sometimes after HMRC has already issued a letter or penalty.

The important thing to understand is that most CIS mistakes can be corrected. HMRC does not expect perfection, but it does expect errors to be identified and put right properly. In my experience the problems arise not from the mistake itself but from ignoring it or trying to fix it in the wrong way.

In this article I want to explain clearly how to correct a mistake on a CIS return, what options are available depending on the type of error, how to deal with HMRC, and how to avoid penalties or reduce them where possible. I will focus on practical steps and real situations rather than theory.

Understanding what a CIS return is and why accuracy matters

A CIS return is the monthly report a contractor submits to HMRC showing payments made to subcontractors in the construction industry. It tells HMRC who was paid, how much was paid, and how much tax was deducted.

HMRC uses CIS returns to

• Credit tax deductions to subcontractors

• Check contractor compliance

• Cross reference against Self Assessment and Corporation Tax returns

Because of this cross checking even small errors can have knock on effects. A wrong amount wrong UTR or missed return can affect both the contractor and the subcontractor.

That said HMRC recognises that mistakes happen and provides methods to correct them.

The most common CIS return mistakes I see

Before explaining how to correct errors it helps to recognise the types of mistakes that occur most often.

Common issues include

• Submitting a return for the wrong month

• Including the wrong subcontractor details

• Using an incorrect UTR

• Applying the wrong deduction rate

• Entering incorrect payment or deduction amounts

• Forgetting to submit a nil return

• Reporting a payment that was not actually made

Each of these errors has a slightly different correction process.

Acting quickly makes correction easier

The sooner you identify and correct a CIS mistake the easier the process usually is. HMRC allows corrections within a certain window and penalties escalate over time if issues are left unresolved.

If you spot a mistake shortly after submission you can often correct it without penalties and without complex correspondence.

Leaving it until HMRC writes to you limits your options and increases stress.

Correcting a CIS return within the same tax month

If you realise there is a mistake before the monthly CIS deadline has passed you can usually correct it by submitting an amended return.

In this situation you simply submit another CIS return for the same tax month with the correct information. HMRC systems are designed to treat the latest submission as the valid one.

This is the simplest scenario and often resolves the issue immediately.

I always advise checking CIS returns before the deadline where possible to catch errors early.

Correcting a CIS return after the deadline

If the deadline has passed and you discover an error you can still correct it but the process depends on the type of mistake.

For most errors you will need to submit an amended return for the affected month. This tells HMRC what should have been reported originally.

Amended returns replace the original data for that month rather than adding to it, so accuracy is essential.

If the error relates to deductions paid to HMRC you may also need to adjust your payment or account balance.

Correcting incorrect subcontractor details

One of the most common mistakes is entering the wrong subcontractor details such as name or UTR.

If the payment amounts are correct but the subcontractor details are wrong you should submit an amended return with the correct details. This ensures the deduction is credited to the right person.

If this is not corrected the subcontractor may be unable to claim the tax deducted which often leads to disputes.

I often see these issues come to light when subcontractors prepare their tax returns.

Correcting incorrect payment or deduction amounts

If you reported the wrong payment amount or deducted the wrong tax you need to submit an amended CIS return showing the correct figures.

If too much tax was deducted you may need to refund the subcontractor and adjust the next payment to HMRC accordingly. If too little tax was deducted you may need to pay the shortfall to HMRC.

This is an area where contractors can be caught out, because HMRC holds the contractor responsible for correct deductions.

Correcting a missed CIS return

If you failed to submit a CIS return at all for a month the first step is to submit the missing return as soon as possible.

Even if the return is late it is better to submit it than leave it outstanding. Submitting late can stop penalties escalating and demonstrates compliance.

If no subcontractors were paid during the month you still usually need to submit a nil return. Missing nil returns is one of the most common reasons for CIS penalties.

Correcting a return where no payments were made

If you submitted a return stating that payments were made when in fact none were paid you should submit an amended return showing a nil position.

This corrects HMRC’s records and prevents incorrect deductions being credited.

This type of error is often administrative and HMRC is usually pragmatic if it is corrected promptly.

How to submit an amended CIS return

Amended CIS returns are submitted in the same way as original returns, either through HMRC online services or compatible payroll software.

You select the option to submit a return for the relevant tax month and include the correct information.

It is important to include all subcontractors for that month in the amended return, not just the ones affected by the error, because the amended return replaces the original in full.

This point is often misunderstood and can lead to further errors.

Informing subcontractors about corrections

Where a correction affects a subcontractor’s deductions you should inform them as soon as possible.

This is particularly important if deduction amounts change because it affects their tax position.

Providing updated CIS deduction statements helps maintain trust and avoids confusion later.

From my experience clear communication with subcontractors prevents small errors becoming disputes.

Dealing with HMRC after correcting a mistake

In many cases submitting the amended return resolves the issue without further contact. HMRC systems update automatically and balances adjust.

However if a penalty has already been issued or HMRC has written to you it is often sensible to write to HMRC explaining the correction and asking for penalties to be withdrawn if appropriate.

Demonstrating that you identified and corrected the error voluntarily often helps.

Correcting errors where penalties have been issued

If a CIS penalty has been issued due to the mistake you should still correct the return first and then appeal the penalty if appropriate.

HMRC is more likely to cancel penalties where the underlying error has been put right promptly and there is a reasonable explanation.

Ignoring the error and appealing the penalty alone is rarely successful.

Time limits and HMRC expectations

HMRC expects CIS returns to be accurate and timely but it does allow corrections.

There is no fixed published deadline for amending returns, but earlier is always better. Corrections made within the same tax year are usually simpler than those made much later.

In some cases HMRC may ask for explanations if amendments are frequent or significant.

Common mistakes when correcting CIS returns

I see several recurring mistakes when people try to fix CIS errors.

One is submitting a second return with only partial information rather than a full replacement. Another is correcting figures without addressing subcontractor details.

I also see people try to correct CIS errors through Self Assessment or Corporation Tax returns, which does not work. CIS corrections must be made through CIS.

Understanding the correct route avoids compounding the problem.

How software can help reduce CIS mistakes

Using reliable payroll or CIS software significantly reduces errors. Most software validates UTRs checks rates and flags missing returns.

It also makes submitting amended returns easier because past data is readily accessible.

While software is not foolproof it reduces reliance on memory and manual processes.

My experience correcting CIS mistakes for clients

From my experience most CIS mistakes are straightforward to correct if addressed early. HMRC is generally pragmatic where there is evidence of genuine effort to comply.

The more complex cases arise where errors have gone uncorrected for long periods or where records are incomplete.

In those situations careful reconstruction and communication are needed but even then resolution is usually possible.

Preventing future CIS return mistakes

Prevention is always better than correction. I usually recommend

• Using a monthly checklist for CIS returns

• Setting calendar reminders for deadlines

• Reconciling CIS figures monthly

• Keeping subcontractor details up to date

• Reviewing returns before submission

These simple steps prevent the majority of issues I see.

Final thoughts from experience

So how do you correct a mistake on a CIS return, by identifying the error quickly, submitting an amended return with accurate information, adjusting payments where necessary, and communicating clearly with both HMRC and subcontractors.

Mistakes on CIS returns are not the end of the world, but leaving them unresolved can be costly.

Taking prompt and structured action protects you from penalties and maintains trust with the people you work with.

If you treat CIS corrections as part of normal business administration rather than a crisis you will find the process far less daunting and far more manageable.

You may also find our guidance on How do I file monthly CIS returns and What penalties apply for late CIS returns helpful when dealing with related CIS questions. For a broader overview of CIS rules, compliance, and support, you can visit our cis guidance hub.