PAYE Settlement Agreements (PSA) ― overview

Produced by a Tolley Employment Tax expert

Employment Tax

Guidance

A PAYE Settlement Agreement (PSA) is an agreement between the employer and HMRC not to declare certain benefits and expenses on employees’ P11Ds and for the employer to settle the tax and NIC instead.

Why use a PSA?

PSAs are popular with employers because they avoid the requirement to complete P11Ds for certain benefits and also mean the employee does not bear the tax and NIC cost of the benefits included in the agreement. For example, gifts provided to employees or the provision of staff entertainment are generally liable to tax and NIC (see the Gifts and Entertainment ― staff guidance notes) but are provided by employers as a perk. The popularity of such gifts and events with the employees would therefore be reduced if they had to pay tax on the benefit. The PSA passes the tax and NIC liability on these benefits to the employer so the employee receives the benefit free of any tax or NIC.

Using a PSA can save significant administrative costs as there is no need to report minor

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Value Added Tax

Exporting goods ― proof of export

Exporting goods ― proof of exportIn addition to the requirements laid down in the Exporting goods ― overview guidance note, businesses intending to zero-rate exported goods must hold satisfactory evidence that the goods have been delivered to a destination outside of the UK. If satisfactory evidence

15 Dec 2020 14:02 | Produced by Tolley Read more

Value Added Tax

Exemption ― burial and cremation

Exemption ― burial and cremationThis guidance note provides an overview of the VAT treatment of services that are provided in connection with the burial or cremation of human remains.VAT treatmentThe following services are exempt from VAT:•the disposal of the remains of the dead•making arrangements

14 Jul 2020 11:38 | Produced by Tolley Read more

Personal Tax

Self assessment ― amendments and corrections

Self assessment ― amendments and correctionsOnce a self assessment tax return has been filed, both HMRC and the taxpayer (or the agent) has the right to make changes to the return. There are different time limits depending on whether it is a correction by HMRC or an amendment made by the

14 Jul 2020 13:37 | Produced by Tolley Read more

UU��ֱ��