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As stated at E5.547, in the case of a company, amounts of tax deducted under the construction industry scheme (CIS) are primarily set off against 'relevant liabilities', meaning payments due to HMRC in respect of obligations of a subcontractor in its capacity as an employer or contractor (eg PAYE, employer and employee national insurance contributions, deductions made under the CIS).

HMRC had become aware that this set-off facility was being abused by some employers to reduce their monthly employer liabilities or to create spurious repayment claims. Regulations¹ made under powers to be conferred by FA 2021² enable HMRC officers to correct or remove set-off claims made in employer returns where such claims are made on the basis of an error or omission, and also prohibit subcontractors, in some cases, from making further set-off claims for the remainder of the tax year. The regulations have effect in relation to any set-off claim contained in an employer return submitted on or after 6 April 2021 and made in respect of 2021/22 or