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ALEX MILLAR considers the benefits of P11D dispensations and PAYE settlement agreements
KEY POINTS
- Reduce the level of P11D reporting.
- Dispensations apply where tax relief could be claimed by the employee in full.
- PSAs may be used where a taxable benefit arises.
- The limitations on the use of a PSA.
- PSAs may be convenient but do not overlook the extent of the grossed-up liabilities.
As spring approaches many tax advisers will be considering year-end tax planning for their clients. If those clients are employers this may be the time to consider dispensations and PAYE settlement agreements (PSAs) particularly in the context of entertainment and subsistence expenditure.
The background to dispensations is that ITEPA 2003 s 6 s 7 and s 70 to s 72 catch employee expenses which are paid for...
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