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Reviewing Your PAYE Settlement Agreement For COVID-19

PSAs remain active until cancelled ...

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Posted by Helen Beaumont on 16/06/2021 @ 8:00AM

If an employer wants to meet the tax and National Insurance on benefits and expenses for an employee, they use a PAYE Settlement Agreement, also known as a PSA. This is a very useful way to preserve the goodwill of a benefit ...

HMRC is not issuing new P626s in light of a COVID-19 related change to a PSA!

HMRC is not issuing new P626s in light of a COVID-19 related change to a PSA!

copyright: startupstockphotos / pixabay


However, not all benefits are included within a PSA. Qualifying benefits should fall into one of the following:

  • it's a minor benefit

  • It is provided occasionally

  • It is impractical to apply PAYE

  • It is not possible to apportion a shared benefit

PSAs can be used to apportion the likes of an annual party which would fall outside any tax exemptions. The good news is that benefits exempt from tax need not be included.

Any Income Tax and National Insurance that is due on items listed on a PSA in 2020/21 must be paid by the 22nd of October 2021 for electronic payments and the 19th of October 2021 in other cases.

A PSA remains active and in place until cancelled or amended by either the employer or by HMRC themselves. PSAs should be reviewed every 12-months to ensure they are still valid.

"A PSA must be amended by the 6th of July!"

With the pandemic having such an effect on the economy, HMRC is not issuing new P626s in light of a COVID-19 related change to a PSA. Instead, they are issuing an appendix to the existing P626.

COVID-19 exemptions now include antigen testing as well as business equipment an employee has purchased for working from home.

Until next time ...



HELEN BEAUMONT

 
 



Would you like to know more?

If anything I've written in this blog post resonates with you and you'd like to discover more about Paye Settlement Agreements or believe you need to set them up soon, do call me on 01908 774323 and let's see how I can help you.

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About Helen Beaumont ...

 

Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.

Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.

When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.