A PAYE Settlement Agreements (PSA) is an agreement that an employer makes with HMRC under which the employer agrees to pay the tax and National Insurance on certain benefits and expenses provided to employees
Benefits and expenses included in the PSA do not need to be notified to HMRC on form P11D.
A PSA can only be used for payments that are made irregularly and are minor.
Previously it was necessary to agree a PSA with an officer of HMRC before 6th July following the end of the tax year to which it relates. However, HMRC are simplifying the PSA process and as part of this, it will no longer be necessary to agree the terms of the PSA in this way. Further reforms are planned.
The current PSA process largely relies on paper forms but HMRC are to develop an automated PSA process as part of their digital strategy.
Please call us on 01275 852255 to discuss whether a PSA would be suitable for your employees and whether it would save work for you at the end of the year.