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What can be included in a PAYE Settlement Agreement

28 January 13 | By: Jas Jhooty

Items that can be covered by a PSA

  • minor items, such as a small present for an employee in hospital or an employee’s use of a pool car where the conditions for tax exemption don’t apply
  • irregular items, such as expenses of a spouse occasionally accompanying an employee abroad, or relocation expenses in excess of the £8,000 tax exemption threshold
  • items it’s impracticable to operate PAYE on or determine a value for P9D or P11D purposes, such as shared benefits (like shared cars or taxi journeys, for example) that are difficult to attribute to individual employees

Items that can’t be covered by a PSA

  • cash payments – including salary, wages, bonus, or other payments such as long service awards
  • large benefits provided regularly to individual employees, such as company cars or beneficial loans
  • round-sum allowances – lump sums provided to an employee to take care of all their expenses in a tax year
  • shares
  • items on which tax has already been deducted through PAYE
  • items which are already reflected in an employee’s tax code
  • profits arising from various mileage payment schemes and other regular items arising in Employee Car Ownership Schemes


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