A PSA is a flexible scheme you can use to settle any PAYE and NIC due to HMRC on 3 types of expenses and benefits:

  • Minor items
  • Irregular items
  • Items which it’s impractical to operate PAYE on or to value for P9D/P11D purposes

Having a PSA in place will mean that these expenses and benefits will not need to go on a P11D for the employee which they relate to. Instead, you settle the tax and NIC due on the items covered by a PSA with a single payment that includes both:

  • Tax due on the expenses and benefits covered by the PSA – this tax would normally be payable by your employee.
  • Class 1B NIC.


Applying for a PSA

To apply for a PSA, you should write to:

HMRC Local Compliance

Specialist Employer Compliance S0794

PO Box 3900


G70 6AA


You should explain that you want a PSA and describe the expenses and benefits you would like the PSA to cover.


Once HMRC have agreed the expenses and benefits to be covered by your PSA, they will authorise the agreement and send you a signed form P626.


You need to get the agreement in place before the 6 July following the tax year to use the PSA. If this is not done in time then a P11D will need to be submitted instead for that tax year.

A new PSA has to be agreed for each tax year.


Paying tax and NICs under a PSA


The tax and Class 1B NIC owed under a PSA must be paid to HMRC no later than 19 October following the tax year to which the PSA relates (22 October if you pay by electronic means).


When you make the payment to HMRC it is important that you use the right reference. This makes sure your payment reaches your account and that you won’t get reminders after you’ve paid.


You will need to wait for HMRC to send you the payslip to pay your PSA as this will have the unique reference number which you need to quote when making the payment.


Please do not use your PAYE Accounts Office reference number to make your payment, as HMRC will not be able to identify your PSA payment.