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HMRC internal manual

PAYE Settlement Agreements

Overview of PAYE Settlement Agreements

 

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

A payment of expenses or benefits in kind which is not minor can be included in a PSA ifit is paid or provided irregularly to an employee.

In agreeing with employers what may be included in a PSA you must take into account thefacts of each case. For example consider the following

  • the nature of the item
  • the normal frequency of its payment across the workforce
  • how often it was paid or given to the individual employee.

The exclusion of an item given to some employees because it was received regularly bythem would not necessarily mean that the same items if received irregularly by otheremployees would be excluded from a PSA.

In deciding whether an item is received irregularly you must consider the frequency atwhich it is provided during the year for which the PSA applies. In some cases, the periodtaken into account may be longer, for example the use of the employers holidayaccommodation.

The list below is provided to assist you in making your decision, it shows examples ofwhat may constitute an irregular item.

  • relocation expenses where the amounts concerned exceed the £8000 tax exempt threshold (Section 287 ITEPA 2003)
  • occasional attendance at an overseas conference where not all the expenses qualify for relief
  • expenses of a spouse occasionally accompanying an employee abroad
  • occasional use of a company holiday flat
  • one off gifts which are not minor.

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