The in-year repayment route (EPS route) allows a CIS limited-company subcontractor to recover overpaid CIS deductions in real time during the tax year, rather than waiting until after the year-end Self Assessment or Corporation Tax return cycle.
The mechanism uses the Employer Payment Summary (EPS), a routine payroll filing submitted to HMRC via payroll software each month. On the EPS, the company reports the total CIS deductions it has suffered in the year to date. HMRC deducts that figure from the company's PAYE and NIC liability for the same period, reducing the payment due on the 22nd of each month (19th for cheque payers).
How it works in practice:
- Company suffers £2,000 CIS deductions in a month but owes only £800 in PAYE and employer NIC. The net payment to HMRC is nil for that month, with £1,200 carried forward.
- If the cumulative CIS deductions exceed cumulative PAYE/NIC liabilities across the year, HMRC repays the surplus. The target turnaround for these in-year repayments is 25 working days from the EPS filing date.
This matters because the alternative, waiting for the CT600 year-end offset, can mean that deductions made in April sit with HMRC for up to 18 months. For a subcontracting company with modest PAYE payroll, the EPS route can save a significant amount of working capital.
Important conditions: the company must operate a PAYE scheme and submit the EPS on time. Late or missing EPS filings mean HMRC charges the full PAYE amount and the offset is not applied automatically. HMRC will not backdate EPS corrections beyond certain limits, so monthly discipline matters.
For a full explanation of the EPS mechanics, deadlines and common errors, see our guide on CIS for limited companies: how the EPS reclaim works. Use the CIS refund estimator to see whether your company is likely to be in a repayment position.