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Published on 21 February 2018

Draft legislation: Simplification of PAYE Settlement Agreements


In our response, we welcome the simplification introduced by allowing for an enduring PAYE Settlement Agreement (PSA) but stress that adequate guidance needs to be given to ensure that employers understand variation process and in particular what to do if the items initially covered in the enduring PSA change. We also raise concerns that the draft legislation seems to allow HMRC to cancel a PSA without cause and by electronic means (if and when an electronic process is introduced), even if the employer is digitally excluded or otherwise lacks capability to transact digitally.

©Shutterstock/David Crockett

From 6 April 2018, the PAYE (Pay As You Earn) Settlement Agreement (PSA) process will be simplified through removing the current requirement on employers to renew their PSA annually, and providing for an ‘enduring agreement’.

This is a technical consultation on changes to the Income Tax (PAYE) Regulations 2003 to enable this. These amendments will also ensure that digitisation of the process in the future is possible if it is felt that this would support business.

The draft legislation can be found on GOV.UK

Our submission can be found here: Draft legislation: Simplification of PAYE Settlement Agreements – LITRG response

Meredith McCammond

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