PSA deadline approaches

20 October 2020

PAYE Settlement Agreements (PSA) allow employers to make one annual payment in relation to the tax and National Insurance (NI) due on minor, irregular or impracticable expenses or benefits that have been provided to employees.

Anyone who has used a PSA for tax year 2019-20 must ensure that they make this payment by 22 October 2020 if they are paying electronically, to ensure that they don’t have to pay any penalties or interest.

Employers who have a PSA for certain items will not be required to:

  • Process them via payroll to calculate tax and NI
  • Include them in end-of-year P11D forms
  • Pay Class 1A NI on them at the end of the tax year, as Class 1B NI is paid as part of the PSA instead

Some employee expenses are covered by exemptions, which replace dispensations, and will not be need to be included in any end-of-year reports.

There are several ways in which to pay:

Same or next day

  • Online or telephone banking
  • By debit or corporate credit card online
  • At bank or building society

3 working days or more

  • BACS
  • Direct debit
  • By cheque through the post


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