How Do I Submit a Paye Settlement Agreement

As an employer, submitting a Pay As You Earn (PAYE) Settlement Agreement (PSA) is a crucial task that you need to undertake. By doing this, you can settle your employee’s tax and National Insurance (NI) liability for expenses and benefits, making it easier to comply with HM Revenue & Customs (HMRC) regulations.

If you’re unsure about how to submit a PSA, this guide will walk you through the steps.

Step 1: Determine your eligibility for PSA

Before submitting a PSA, you need to ensure that you are eligible for it. You must have a valid PAYE reference number, and the total amount of tax and NI due must be over £1000. Additionally, you need to have at least two employees, and you must have provided some benefits or expenses to them that you need to settle.

Step 2: Gather the required information

Once you’ve confirmed that you’re eligible for PSA, it’s time to gather the necessary information. This includes details about the employees who received expenses or benefits. You’ll need their names, National Insurance numbers, taxable pay, and the total amount of expenses and benefits provided.

It’s crucial to keep accurate records of all expenses and benefits provided to employees throughout the tax year. This will help you to complete the PSA accurately and efficiently.

Step 3: Fill out the PSA form

The PSA form is available on the HMRC website. You will need to complete all relevant sections of the form, providing accurate information about the employees who received benefits and expenses, as well as the total amount of tax and NI due.

When filling out the form, make sure that you double-check all details before submitting it to avoid any errors.

Step 4: Submit the PSA form

The PSA form can be submitted either online or by post. If you are submitting online, you will need to use the HMRC’s online service. You will need to provide your Government Gateway credentials to access the service.

If you decide to submit the PSA form by post, you should send it to HM Revenue and Customs, Pay As You Earn and Self-Assessment, BX9 1AS.

Step 5: Pay the tax and NI due

Once you’ve submitted the PSA form, you will receive a letter from HMRC confirming the total amount of tax and NI due. You will then need to pay the amount due by the deadline provided in the letter.

Conclusion

Submitting a PSA is a necessary task for employers who provide benefits and expenses to their employees. By following these steps, you can ensure that you comply with all regulations and make the process as smooth as possible. Remember to keep accurate records throughout the tax year to make the PSA process more straightforward.