PAYE Settlement Agreement deadline 6 July 25 June 2019
A PSA can be entered into at any time before 6 July following the end of the tax year to which it first applies, so any agreements for the 2018-19 tax year should be reached with HMRC by 5 July 2019.
A PAYE Settlement Agreement (PSA) allows you to make one annual payment to cover all the tax and National Insurance due on minor, irregular or impracticable expenses or benefits for your employees. If you get a PSA for these items, you will not need to: • put them through your payroll to work out tax and National Insurance • include them in your end-of-year P11D forms • pay Class 1A National Insurance on them at the end of the tax year (you pay Class 1B National Insurance as part of your PSA instead)
Once a PSA has been entered into, the agreement is enduring.
The final due date for payments is 19 October (or 22 October where paid by an approved electronic payment method) following the year to which the PSA applies, but payments of tax and NICs can be made at any time after the agreement is signed.
For further information on PSAs visit gov.uk.
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Special arrangements for part-time Office Holders 1 July 2019
Prior to April 2019, public bodies were able to enter into special arrangements with HMRC to account for the tax and National Insurance contributions on behalf of part time Office Holders in respect of home to office travel and subsistence payments.
These special arrangements were in existence for a number of years prior to the introduction of PAYE Settlement Agreements.
Following a review undertaken by HMRC, it was decided to withdraw these special arrangements from 6 April 2019 and public bodies were notified of this change by letter.
The change means that any payments made to the part time Office Holders in respect of travel and subsistence payments from 6 April 2019 will have to be paid through the payroll to account for the tax and National Insurance due.
There is still the option to account for the tax and National Insurance due by grossing up the payments through the payroll. Further information on this can be found on gov.uk.
Prior to 6 April 2019, as part of the terms of a part time appointment, government departments and public bodies often paid the expense of travel between the office holder’s home and the usual place where duties are performed and a subsistence allowance for periods spent there. Office holders were often invited to enter into an agreement whereby the payer accounts for tax on payments towards travel and subsistence. These expenses payments were then not treated as pay for tax deduction purposes, not included on the Deductions Working Sheet of the individual and not included by the individual as expenses payments on tax returns.
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The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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