Payroll insight
What is a PSA? A PSA is a formal arrangement made between the employer and HMRC that allows the employer to make a single annual payment to cover all tax and NICs due on expenses and/or benefits that fall under the heading small or irregular. It is estimated that there are approximately 30,000 applications for PSAs made each year, which could be a reflection of either or both how popular administrative simplicity has become or of how complex employment reward packages are now. A PSA can be applied for, or varied (if applicable), at any time before the relevant tax year starts until 6 July following the end of the tax year to which the PSA relates. The timescales require an employer to predict what items they may want to include, which over the years has proved to be a challenge and sees many applications being received after the start of the relevant tax year and indeed after that tax year has ended. Items most commonly included (and repeated each tax year) within a PSA include Christmas parties, working
whether, as a result of the statutory exemption to trivial benefits, the concept of ‘minor’ (see first bullet in Condition B in the box) is now outdated so that removal will achieve simplification and additional certainty. The decision as to whether an item is ‘irregular’ (see second bullet in Condition B in the box) could see the incorporation of principles, set out in guidance, to make it easier to determine this as follows: ● be considered in the context of a tax year ● not be something which occurs in any pattern: every day, week, month, other month, or quarter, and ● not include items which employees have a contractual right to (e.g. bonuses, regardless of how infrequently or at what intervals they are paid or how they are made up). The rules about impracticability (see third and fourth bullets in Condition B in the box) are felt to be clear and straightforward to apply and so are likely to remain but with strengthened guidance to provide clarity on what will not meet the impracticable test. n
lunches, team-building exercises and staff incentive awards. To be included within a PSA the items must be ‘qualifying general earnings’, and meet the following conditions A and B: ● Condition A – the items covered must comprise ❍ taxable benefits provided or made available by reason of employment with the employer, or ❍ expenses paid to persons holding those employments. ● Condition B – the items covered must be: ❍ minor, with regards to the cost of the benefit provided or made available, or ❍ irregular, as regards the frequency in which, or the times at which, the sums are paid or the benefit is provided or made available, or ❍ paid in circumstances where deduction of tax by reference to the tax tables is impracticable, or ❍ in the case of a benefit provided or made available, shared between employees so that apportionment of the benefit between the employees is impracticable.
Counts towards CPD
Gender pay gap reporting and HR implications Training course
Half day duration
This course covers: l Background and reasons for the policy including current voluntary and public section reporting, and the legislative process l Gender pay gap reporting requirements l Implications for your organisation l Future developments including ethnicity pay gap reporting l And much more This course is designed to give delegates details of their responsibilities to meet the mandatory gender pay gap reporting accurately, and on time.
For full details or to book your place, please visit cipp.org.uk , email training@cipp.org.uk or call 0121 712 1063 .
cipp.org.uk
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Issue 25 | November 2016
| Professional in Payroll, Pensions and Reward |
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