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HMRC internal manual

PAYE Settlement Agreements

HM Revenue & Customs
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Overview of PAYE Settlement Agreements

PSA1050 explains that a payment of expenses or benefits in kind can be included in a PSA if it is ‘minor’ as regards the sums paid or the type of benefit provided. This section aims to help you to interpret that term.

In agreeing with employers what may be included in a PSA you must take into account the nature of the item and the circumstances in which it was paid.

There are no pre-set monetary limits to define the valuation of ‘minor’. You must use objective judgement to decide whether an item is minor in value. The list below is provided to assist you in making a judgement, it shows examples of what may constitute a minor item.

  • incentive awards
  • reimbursement of late night taxi fares outside s248 ITEPA 2003
  • personal incidental expenses in excess of the statutory daily limit
  • present for an employee in hospital
  • staff entertainment, for example a ticket for Wimbledon
  • use of a pool car where the conditions for tax exemption are not satisfied
  • subscriptions to gyms, sports clubs etc
  • telephone bills
  • gift vouchers and small gifts

This list is for illustrative purposes only it is not exhaustive.

Note. Items that are regarded as trivial benefits should not be included in a PSA, however if a benefit cannot be considered to be trivial it may be considered to be minor and suitable for a PSA. For further guidance on trivial benefits see PSA1090.