Draft legislation: Simplification of PAYE Settlement Agreements

12 February 2018

From 6 April 2018, the PAYE (Pay As You Earn) Settlement Agreement (PSA) process will be simplified through removing the current requirement on employers to renew their PSA annually, and providing for an ‘enduring agreement’.

Changes to the Income Tax (PAYE) Regulations 2003 are required to enable this and draft legislation has been published for a short period of technical consultation (closes at 11:45pm on 21 February 2018).

The draft legislation introduces the concept of a PSA being an ‘enduring’ agreement. This agreement will continue to remain in place for each subsequent tax year until varied or cancelled, either by the employer, or HMRC. This simplification removes the need for an upfront annual agreement for employers who wish to use this option.

Further changes will allow PSA applications to be processed electronically without the need for agreement with an officer of HMRC, if and when digital processes are introduced.

Geographical extent - United Kingdom


CIPP comment

With such a short consultation period we are unable to consult with members and the wider payroll profession. If any interested parties have comments on the draft legislation, we will be more than happy to collate and pass on to HMRC. Please email us at policy by 10am on 21 February, using PSAs in the subject box.