An Employer Payment Summary (EPS) is a submission made by an employer through RTI (Real Time Information) payroll software to HMRC each month, reporting any adjustments to the PAYE and NIC liabilities that appear on the Full Payment Submission. For limited companies operating under CIS, the EPS is the mechanism through which the company offsets CIS deductions it has suffered against its monthly PAYE bill, creating a real-time recovery cycle rather than waiting until the tax year end.

The process works as follows: each month, the company calculates its PAYE and employer NIC liability for its employees. If the company has also suffered CIS deductions on payments it received from contractors during the month, it reports those deductions on the EPS. HMRC sets the CIS deductions suffered against the PAYE due. If CIS deductions exceed the PAYE liability, the surplus carries forward to the following month automatically. Any credit still unabsorbed at 5 April can be repaid by HMRC or set against the Corporation Tax bill. That year-end repayment is a claim HMRC has to process, and HMRC says it will usually respond to one within 8 weeks. The monthly offset itself is not a claim at all, so no HMRC turnaround applies to it.

The EPS route is one of the most significant practical advantages of operating through a limited company for CIS subcontractors. A sole-trader subcontractor must wait until after the tax year to claim overpaid CIS through Self Assessment, a wait that can be 12 to 18 months. A limited company using the EPS can recover the same cash month by month, improving working capital materially.

  • Who can use it: limited companies that have suffered CIS deductions and operate a PAYE scheme.
  • Offset mechanism: CIS deductions suffered reduce the PAYE and employer NIC due that month.
  • Surplus: carries forward automatically if CIS exceeds PAYE.
  • Year-end claim: HMRC will usually respond to a limited-company CIS repayment claim within 8 weeks. The monthly EPS offset has no HMRC turnaround because it is not a claim.
  • Year-end: any unabsorbed credit can be set against Corporation Tax or repaid.

A full worked example of the monthly EPS reclaim cycle, including what happens when deductions exceed PAYE for several consecutive months, is at CIS for limited companies: how the EPS reclaim works and why timing matters. If your company is owed a CIS refund and you are unsure whether the EPS route applies, see our CIS refund service.