PSA1140 - Overview of PAYE Settlement Agreements: What employers should tell employees about PSAs

PSAs are a statutory arrangement between employers and HMRC. The normal rules of confidentiality prevent you giving employees information about what is included in their employer’sPSA.

Employees may contact you because they are uncertain whether particular items should be included in their own tax return or whether they have been included in the employers PSA.

Where this happens you should refer the employee to their employer for the information.

Whilst there is no statutory requirement for employers to tell employees what is in their PSA you should encourage employers to do so by explaining that this may reduce the number of queries they receive from employees who are completing their own tax returns.

The information employers provide to their employees need not be particularly detailed.You should advise employers,

• to say something like ‘I am paying tax on the (enter items) for the tax year (enter year). If you received any of these items in that tax year you do not need to put them on your tax return.’
• that it is not necessary for employees to be told individually which items are included in a PSA, though there is nothing to stop the employer doing so.
• that they should make this information available to their employees either on commencement of the PSA, or at the end of each tax year.