How do I catch up on two years of late CIS subcontractor tax returns?

You file each overdue year as its own separate return, using that year's CIS statements, income and expenses. Two years missed usually means two sets of late filing penalties and interest, but CIS subcontractors often find the underlying tax position is a refund rather than a bill.

Start by gathering CIS statements from every contractor for both tax years, bank statements covering the full periods, and receipts or estimates for materials, tools, travel, insurance and subsistence. Where statements are missing, contractors can usually reissue them, and HMRC's own record of CIS deductions reported against your UTR is a useful cross-check.

Each year is calculated independently: expenses, personal allowance and payments on account only apply within their own tax year, so the two returns cannot be blended together even though they are being prepared at the same time.

Late filing penalties start at £100 per return as soon as the deadline passes, rising with further fixed and tax-geared penalties the longer the delay continues, and interest accrues on any tax paid late. Filing promptly stops the position getting worse even if you cannot pay everything immediately.

Once both returns are filed, HMRC recalculates your position, and where CIS deductions exceeded the tax actually due, refunds are set against any penalties or balances owed before being paid out, so it is worth completing both years together rather than one at a time.

Rates, thresholds and deadlines quoted here reflect the 2026/27 UK position and current Companies House and HMRC guidance. Check GOV.UK, or ask us, before relying on them for your own company.