PAYE: PAYE Settlement Agreement (PSA1) 2020-21

19 April 2021

The PAYE Settlement Agreement (PSA1) form for 2020-21 has been published.

The form should be utilised by employers who need to tell HMRC the value of any items included in a PAYE Settlement Agreement (PSA). A PSA allows employers to make one annual payment in relation to the tax and National Insurance (NI) due on minor, irregular or impracticable expenses or benefits for their employees.

The items included on a PSA will not need to be recorded on end of year P11Ds, nor will they need to be processed via payroll.

Employers are reminded to ensure that they select the correct form, as they will be required to record employees separately on the basis of the rate of tax that they pay. Employees living in countries with devolved tax powers (Scotland or Wales) could potentially be subject to different rates of Income Tax.

The form needs to be completed in full before the option to print it is made available. Partly saved forms cannot be saved, so HMRC recommends that all relevant data is collated prior to completion of the form.

 


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