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HMRC internal manual

PAYE Settlement Agreements


Items Omitted or Undervalued

You may discover items which should have fallen within the scope of the PSA have been omitted or undervalued. For example, the employer agreed to include all Christmas gifts to employees in their PSA but you discover that only half the gifts were include in the agreement.

Where you identify such cases first check whether the employer operated PAYE or reported the benefit on P11D/P9D. Then

  • tell the employer that the items are covered by the PSA and that strictly the agreement means they are liable for the tax and NICs due
  • establish whether the employer wishes the PSA to continue for those items
  • do not enforce the PSA where tax has been paid by another method
  • where the tax has not been paid by another method and the amounts due are substantial consider a Regulation 110 determination to recover the shortfall. See PSA4000 for guidance relating to Regulation 110 determinations.

Where errors bring into doubt the employers general operation of PAYE refer the case to RIAT to consider an Employer Compliance Review.