A PAYE Settlement Agreement (PSA) allows employers to make one annual payment to cover all the tax and National Insurance due on small or irregular taxable expenses or benefits for your employees.

The expenses or benefits included in a PSA must be defined as one of the following:

• minor – e.g. a small birthday present
• irregular – e.g. one-off relocation expenses over £8,000 (these are tax-free below £8,000)
• impracticable (difficult to work out the value of or divide up between individual employees) – e.g. shared cars or taxi journeys

Employers that are required to notify HMRC of the value of items included in a PAYE settlement agreement (PSA) must do so using form PSA1. HMRC will send new PSAs before the start of the 2018-19 tax year. If there have been no changes since the last PSA
was agreed, all an employer needs to do is sign the new agreement and return to HMRC by 6 July 2018.

The deadline for an electronic payment for a PSA for the year ended 5 April 2018 to clear into HMRC’s bank account is 22 October 2018. Employers that pay by cheque must ensure that the payment reaches HMRC’s Accounts Office by 19 October 2018.  There may
be interest and / or a late payment penalty due where the payment is made late.

Source: New feed