Pay As You Earn Settlement Agreement (PSA)

Not something that many people know about, even less understand it, but most employers would be expected to have one.

What is it? Well, it is a way of paying tax and national insurance that would generally be due on gifts and benefits provided to your employees on their behalf. For example, you would not give an employee a bouquet of flowers to say thank you for a job well done and then enter the cost of them on a form P11D so that the employee paid tax on them!

It cannot be used to pay the tax on say a company car but it can be used for irregular items - such as the flowers. You may have never done one but chances are there would be items within your business that are appropriate to be included in a PSA. In the event of an Inland Revenue inspection these items would be identified and, if no tax and national insurance paid on them, this would be sought from you. A proactive approach to such matters is always best practice and we can help you to get it right the first time.