I am doing a 2010/11 tax return for a new client. A contractor for whom he has worked has been making a hash of the CIS deductions process. For example, if he was paid £1,000 in a fortnight, the contractor has advised that that the figure is after deducting £200, when of course it should be £250. This has happened over 20 or 30 weeks so the tax involved is not insignificant. There is a separate issue of complying with the rules for CIS returns etc, but in terms of a tax return I am torn between advising my client that his turnover is £1,250 or £1,200. In other words should my client A. State his income is £1,250 and show CIS deducted of £250 (even though he knows the contractor has only paid over £200), or should he B state his income is £1,250 and show CIS deducted of £200 (in which case he has a shortfall in tax paid and has to make up the difference) or does he C. State his income is £1,200 and show deductions of £200. I have been leaning towards Option B (mainly because if he goes for Option A this may lead to an enquiry and he would like to receive future work from the contractor) but would genuinely welcome opinion on this matter.