You must submit annually to HMRC a calculation of the income tax due and Class 1B NIC. HMRC will verify the calculation and confirm approval if the basic calculation appears to be correct. Properly used, PAY settlement agreements can be an effective and effective way to reward staff for these unique opportunities. Only take into account the tax status of employees when calculating taxes and NICs due. If you don`t have a PSA agreement yet, our team of labour tax specialists can help you set them up and work with HMRC to ensure the agreement contains everything you want to include now and in the future. The Agreement will continue until you or HMRC announce it or need to change it. You do not need to renew the PSA every fiscal year. To manage its resources, HMRC requests the calculations, which are submitted annually until a specific date, which may vary depending on the agreement, but which is usually July 31 or August 31. It should be noted, however, that there is indeed no legal deadline for submitting calculations, so no penalty can be imposed for non-submission of your calculation until that date. Pay settlement agreements (SAAs) are often used by employers to maintain compliance with personnel costs and delivery processes.
By entering into this formal agreement, an employer can pay all taxes due on expenses and benefits made available to employees through an annual deposit and payment to HMRC. From April 2018, the annual PPE renewal process has been simplified, so employers are not required to agree in advance on PPE with HMRC each year if the categories remain the same. According to the agreement, PSA will remain in force until either the employer or HMRC cancels or amends it. For advice on viewing and calculating your PPE, please contact HMRC`s Employer Helpline. If you have employees residing in Scotland or Wales (whom you can identify using their PAYE codes in your payroll system), you must apply the applicable tax rates in your calculation for benefits for those employees. For 2019/20, tax rates in Wales remain consistent with those applied in England and Northern Ireland, but Scottish tax rates are different and therefore caution should be exercised to ensure that you apply tax rates correctly in your calculation. . .