A CIS corporation tax offset is the mechanism by which a limited-company subcontractor sets CIS deductions suffered during the year against the company's Corporation Tax liability, reducing or eliminating the CT bill rather than waiting for a separate cash repayment.
The offset works at year-end through the Corporation Tax return (CT600). The company reports its CIS deductions on supplementary page CT600H. HMRC applies the deductions first against the CT liability for the period. If the CIS deductions exceed the CT due, the surplus is repaid in cash.
This is distinct from the in-year EPS route, which offsets CIS deductions against PAYE and NIC liabilities every month. The two mechanisms run in parallel:
- Month by month: CIS deductions reduce the company's PAYE/NIC payments via the Employer Payment Summary.
- Year-end: any remaining unrelieved CIS deductions (where the company has little or no PAYE payroll) are offset against Corporation Tax on the CT600.
For 2026/27, Corporation Tax rates are 25% on profits over £250,000, 19% on profits under £50,000, with marginal relief between those figures. A company with a CT liability of £8,000 and CIS deductions of £10,000 would have its full CT bill wiped out and receive a £2,000 repayment.
One practical point: if a limited-company director is also drawing a salary and has PAYE obligations, the EPS route will often clear the deductions faster than waiting for the annual CT600 cycle. A CIS specialist will review both routes and choose the combination that minimises the time value of money tied up in HMRC's hands.
See our guide on how the EPS reclaim works for the month-by-month mechanics, and our CIS refund service page for how we handle both routes for limited-company clients.