How Do I Correct a Mistake on a CIS Return

If you are a contractor operating under the Construction Industry Scheme (CIS), submitting accurate monthly returns to HMRC is essential. These returns show payments made to subcontractors and any tax deducted. However, mistakes can happen, such as entering the wrong figures, omitting a subcontractor, or submitting duplicate information. The good news is that HMRC allows you to correct these errors easily. This article explains how to correct a mistake on a CIS return, what to do if you have over- or under-reported deductions, and how to prevent future issues.

Understanding CIS Returns

Under the Construction Industry Scheme, contractors must file a monthly CIS return with HMRC by the 19th of each month. This return includes:

  • The total payments made to each subcontractor.

  • The amount of CIS tax deducted (usually 20 percent or 30 percent).

  • Verification details for each subcontractor.

These returns ensure HMRC records subcontractors’ income correctly and that the right amount of tax has been deducted. Mistakes on a CIS return can affect both the contractor’s compliance record and the subcontractor’s tax position, so correcting them promptly is important.

Common CIS Return Mistakes

CIS errors can occur for several reasons. The most frequent issues include:

  • Entering incorrect payment or deduction amounts.

  • Forgetting to include a subcontractor.

  • Reporting the same subcontractor twice.

  • Using the wrong verification number or tax deduction rate.

  • Submitting a return with missing or inaccurate information.

Even minor errors can lead to discrepancies in HMRC’s records, so you should correct them as soon as possible once discovered.

How to Correct an Error in Your CIS Return

If you realise a mistake has been made after submitting your CIS return, you can submit an amended return to HMRC. The process depends on how you originally filed the return.

If You File Online Using HMRC’s CIS Service

  1. Log in to your HMRC online account.

  2. Go to the CIS section and select the return you want to amend.

  3. Choose the option to make changes or amend this return.

  4. Update the incorrect figures or add any missing information.

  5. Review the changes carefully, then resubmit the amended return.

Once the corrected return is submitted, HMRC’s system will replace the original version. Always double-check that the new figures are accurate before resubmitting.

If You File Using Accounting or Payroll Software

Most CIS-compliant software, such as Sage, Xero, or BrightPay, allows you to amend previous returns directly within the platform. You can:

  1. Open the relevant period.

  2. Correct the error (for example, by editing a subcontractor’s payment record).

  3. Resubmit the amended return electronically to HMRC.

Your software should automatically update the submission reference and provide confirmation once HMRC accepts the correction.

What If You Need to Remove a Subcontractor or Duplicate Entry

If a subcontractor was entered incorrectly or duplicated, you can delete their record from the CIS return before resubmitting.

To do this, open the return, locate the subcontractor’s entry, and remove it. Then check that the totals for payments and deductions reflect the change before resubmitting the amended return.

If you have already paid HMRC based on incorrect figures, the overpayment can be adjusted in your next CIS return or reclaimed directly from HMRC.

What If You Missed a Subcontractor

If you forgot to include a subcontractor on your CIS return, simply add them to the amended submission. You must also verify them with HMRC before making deductions if they are new to your business.

Once verified, include their details, payment amount, and deduction in the corrected return. This ensures their records are updated and the right tax credit is applied to their account.

How to Correct Overpayments and Underpayments

If an error led to an overpayment or underpayment of CIS deductions, you can usually correct this on your next return.

  • Overpayment: Deduct the overpaid amount from your next month’s CIS liability. If the overpayment is large or you have no future deductions, you can apply to HMRC for a refund.

  • Underpayment: Add the missing amount to your next return and pay the outstanding balance to HMRC as soon as possible to avoid penalties or interest.

It is important to keep a clear record of any adjustments made and ensure they match your CIS statements and bank transactions.

Correcting CIS Returns Submitted Late

If your CIS return was incorrect and also submitted late, you may receive an automatic penalty from HMRC. However, correcting the return quickly and paying any outstanding tax can help reduce or cancel the penalty.

If you believe there was a reasonable excuse for the delay or mistake, such as illness or software failure, you can appeal the penalty through your HMRC account.

Keeping Records to Support Corrections

HMRC may request evidence to support any corrections you make. You should keep detailed records for at least three years, including:

  • CIS payment and deduction statements.

  • Invoices and receipts for subcontractor work.

  • Bank statements showing payments made.

  • Copies of amended CIS returns and confirmation of resubmission.

Accurate records protect your business if HMRC audits your CIS submissions or queries your deductions.

Avoiding Future CIS Mistakes

To reduce the likelihood of errors on future CIS returns:

  • Reconcile your subcontractor payments before submitting.

  • Use CIS-compliant accounting software with built-in validation.

  • Verify new subcontractors with HMRC before paying them.

  • Check that all deductions match CIS payment statements.

  • Set reminders for CIS submission deadlines.

Regular reviews by an accountant can also help identify discrepancies early and keep your CIS reporting consistent.

How an Accountant Can Help with CIS Corrections

An accountant experienced in the Construction Industry Scheme can make the correction process faster and more accurate. They can:

  • Review your CIS submissions for errors or inconsistencies.

  • Amend returns and liaise with HMRC on your behalf.

  • Reconcile payments and deductions to ensure accurate records.

  • Handle CIS refunds or adjustments for overpayments.

  • Implement systems to prevent future reporting mistakes.

With professional support, you can correct errors confidently and avoid unnecessary fines or disputes with HMRC.

Summary

If you make a mistake on a CIS return, it can be corrected easily by submitting an amended return through HMRC’s online service or your accounting software. Whether you have entered the wrong figures, missed a subcontractor, or duplicated payments, corrections ensure your CIS records stay accurate and your subcontractors receive proper credit for deductions.

Prompt action, good record keeping, and professional advice can help you fix errors quickly and maintain compliance with HMRC’s Construction Industry Scheme.