Employers sometimes pay benefits to their employees and want to pay tax on behalf of workers. A PAYE billing agreement (PAYA) is an annual voluntary agreement that allows them to do so. Not all items covered by an EPI should be reported on a staff member`s P11D form. An EPI must be implemented until 6 July following the end of the fiscal year on which the EPI to which it applies is in force. Until recently, an employer had to apply for a new contract each year, but the PPIs are now in place and are in effect until they are repealed or varied. PAYA compensation agreements (PAYA) are often used by employers to maintain compliance with employee cost and social benefits procedures. By entering into this formal agreement, an employer can pay any tax due on expenses and benefits to workers through an annual submission and payment to the HMRC. Articles contained in an EPI should not be reported separately, for example. B on the payroll or in the employee`s P11D. Instead of being taxed on the worker through the P11D process, they are taxed through this annual compensation to the employer. Instead of not paying Class 1A through P11D (b), the value of benefits is subject to National Insurance Class 1B (NIC) contributions. If you do not have an PPE yet and miss this deadline, it is possible to make a voluntary disclosure and a tally of items that you would otherwise have included in an EPI.
However, in certain circumstances, HMRC may impose penalties and collect interest on amounts paid in this way. From April 2018, the annual process for renewing PPE contracts has been simplified, so employers are not required to agree to a PSA with HMRC each year if the categories remain the same. Under the agreement, the EPI will remain in place until the employer or HMRC terminates or amends it. They must submit an annual calculation of the income tax payable and the Class 1B NIC. HMRC will verify the calculation and confirm the consent if the basic calculation appears to be correct. If you don`t have a PSA agreement yet, our team of labour tax specialists can help you set up and contact HMRC to make sure the agreement contains everything you want to include now and in the future. An EPI can also help reduce employer management by removing and replacing the requirement to include certain taxable expenses/benefits in employeeS` P11Ds with an annual comparison of HMRC. To manage their resources, HMRC requests calculations that are submitted annually until a specified date that may differ by agreement, but which is usually July 31 or August 31. It is interesting to note, however, that there is no legal time limit for submitting calculations, so no penalty can be imposed for not presenting your calculation until that date. To obtain a PSA, the employer must write to HMRC Business Tax Operations (see address below) out of the costs and benefits that the EPI must cover. Subject to the agreement, HMRC will send two copies of Form P626. These forms indicate all the elements to be included in the EPI and the date on which hmrc calculations are to be provided.
Both forms must be signed and returned to HMRC by an authorized representative of the employer, who will then be approved by the signature of both copies and returned to the employer. The deadline for submitting PSA income tax calculations and NIC calculations to HMRC is indicated in the agreement and generally ends on July 31 following the end of the tax. Psa`s liability payment deadline is October 22 after the end of the fiscal year or October 19 if the employer does not pay electronically. An EPI can save time compared to filling out P11D forms or including items in the payroll. However, PPE is expensive for once a PSA is agreed with HMRC, it will remain in effect for future fiscal years until they are varied or revoked by HMRC or the employer. Summary of capital premiums for motor vehiclesThe current capital premiums for motor vehicles are: Type of poolBedRateLegislationMain-Tari