As the 6 July deadline for applying for a PAYE settlement agreement (PSA) for 2024-25 nears – this can be an efficient way for employers to settle their tax obligations – companies must recognise that PSAs come with challenges.
First note that the PSA is not designed to be a ‘catch-all’ – it is not a process whereby employers can include all those items which should have been reported in the PAYE or P11D system but were for one reason or another ‘ignored’. This means for example that annual benefits which were included in an employee’s PAYE tax code or round sum allowances shouldn’t be in a PSA.
Rather it should capture those ‘perquisites’ which are ‘minor irregular or impractical to capture in another way’. While the precise items covered by a PSA are agreed on an employer-by-employer basis with HMRC they typically...
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