Source: https://www.quantsurv.com/resources/glossary/set-off Content format: Markdown version of the public page. Content reviewed: 2026-09-30 # Set-off: definition and example Deducting money one party says it is owed from money it owes the other. By [Jack Butler-Kettle]() · Updated 30 September 2026 Guidance for England and Wales. Check the contract, amendments and facts that apply to your job. ## What it means in practice Read this alongside [section 111 of the Housing Grants, Construction and Regeneration Act 1996](). Set-off concerns using one asserted monetary claim against a sum otherwise payable. The basis may depend on contract or law, and payment-notice requirements can restrict what is payable in a particular cycle. The mere assertion of a counterclaim does not settle its validity or amount. Separate the claimed entitlement from the payment procedure. [Contra-charge recovery]() can help examine deductions and their supporting records. ## Worked example ### The facts A contractor proposes to deduct £3,000 of alleged damage costs from a £10,000 payment. ### What happens 1. The subcontractor requests the basis and evidence for the alleged £3,000 claim. 2. It separately checks the applicable payment notices and timetable. ### What this shows The proposed £7,000 net payment is not accepted as correct solely because the arithmetic adds up. ## Sources 1. [Housing Grants, Construction and Regeneration Act 1996, s 111 (Requirement to pay notified sum)](). legislation.gov.uk.