23 June 2025
If you need to apply for a 2024/25 (tax year to 5 April 2025) PAYE Settlement Agreement (PSA), then you need to apply to HMRC by 5 July 2025.
What is a PSA?
A PSA enables employers to consolidate the income tax and National Insurance contributions (NICs) due on minor, irregular, or administrative benefits into a single annual payment, simplifying payroll administration. The alternative would be to declare such benefits on forms P11D and end up in a situation where an employee pays tax on a minor reward.
What You Can Include
Typical inclusions under a PSA are small-scale or one-off staff benefits—such as home‐working refreshments, staff events, minor gifts etc—that would otherwise trigger individual P11D reporting .
Next Steps
Assess eligibility — review all minor or irregular benefits provided during 2024/25.
Determine scope — identify which items warrant inclusion under the PSA.
Submit application— complete the HMRC forms by 5 July 2025.
Calculate liability — include both Income Tax and Class 1A NICs in your consolidated annual payment.
Why Use a PSA?
Administrative simplicity: Streamlines payroll by eliminating numerous P11D filings.
Risk management: Helps avoid misreporting small, frequent benefits which lead to penalties on the employer.
Cash flow certainty: Enables budgeting for an annual summed payment rather than multiple individual liabilities.
How We Can Help
We offer tailored support that includes:
PSA eligibility and scope analysis
Comprehensive preparation of tax and NIC calculations
Management of PSA submissions
Liaising with HMRC where necessary
Action Required
If you’re considering a PSA for 2024–25, please contact us ASAP to ensure ample time for review and submission before the 5 July deadline.
