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PSAs - a very good thing

01 November 2006 / Paul Tucker
Issue: 4082 / Categories: Comment & Analysis , Income Tax
PAUL TUCKER highlights the attractions and costs of using a PAYE settlement agreement.

EMPLOYERS SOMETIMES PROVIDE benefits for their employees but wish to pay the tax on their behalf. A PAYE settlement agreement enables them to do this. Although it is an expensive exercise as the tax is calculated on a grossed up basis employers are usually attracted by the time saving and the motivational benefits.
A PAYE settlement agreement is an annual voluntary agreement covered by Part 6 Income Tax (PAYE) Regulations SI 2003 No 2682 between an employer and HMRC to settle an employee's tax and National Insurance liabilities on some expenses and benefits.

Why have a PSA?

There are some expenses and benefits that an employer would prefer not to show on an employee's P9D or P11D or it is impractical to do so or both as the following two examples show.
Both Examples 1 and 2 highlight not only...

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