A PAYE Settlement Agreement (PSA) allows companies to make one annual payment to cover all the tax and National Insurance due on minor, irregular or impracticable expenses or benefits for their employees.
If companies get a PSA for these items, they will not need to:
- put them through their payroll to work out tax and National Insurance
- include them in their end-of-year P11D forms
- pay Class 1A National Insurance on them at the end of the tax year (companies pay Class 1B National Insurance as part of your PSA instead)
Some employee expenses are covered by exemptions (which have replaced dispensations), meaning that companies will not have to include them in their end-of-year reports.
At this stage, it is advised that companies with a PSA in place should review their agreement to see what deadline date HMRC have set for submitting the return. The deadline for each company is mentioned within the individual agreement. For additional guidance and support in PAYE Settlement Agreements, please visit the Government website.
As this deadline approaches, activpayroll can help customers and prospects alike with applications and reporting.
If you would like to discuss your specific needs in greater detail or require further assistance, please contact our Audit & Compliance Manager Simon Wright via email simon.wright@activpayroll.com.
To discover what additional services activpayroll can offer, please visit our What We Do page.