Benefits in Kind Flashcards
1
Q
What is a PSA
A
A PAYE settlement agreement, an agreement between an employer and HMRC which passes the tax liability of any minor irregular benefits to employee on to the employer
Only allowable if the benefit is minor, irregular or if it is not reasonable for the value of the benefit to be apportioned between each employer.
2
Q
How to calculate the tax owed by the employee on a PSA. Discuss reporting requirements
A
Net amount - Value of benefit
Gross up using calculated marginal rate of tax.
Calculate tax
Needs to be reported to HMRC following the end of the tax year in which the benefit was received. Any tax liability must be paid by the 22nd October if paid electronically (19th October otherwise)
