PART 6PAYE SETTLEMENT AGREEMENTS
Payment of tax under PSA
Calculation of tax payable under PSAI1108
F81
A PSA must provide that the employer is accountable to HMRC for the income tax due.
F61A
A PSA must provide for the sums due to be—
a
computed annually in accordance with the factors specified in paragraph (2), and
b
comprised of the amounts specified in paragraph (3)
2
The factors are—
a
in the case of qualifying general earnings comprising sums paid in respect of expenses, the estimated aggregate amount of such payments on which income tax is chargeable, reduced by such amount (if any) as would have been deductible if the qualifying general earnings had not been included in the PSA;
b
in the case of qualifying general earnings comprising benefits provided or made available, the estimated aggregate amount of the cash equivalents and other amounts on which income tax is chargeable, reduced by such amount (if any) as would have been deductible if the qualifying general earnings had not been included in the PSA;
c
the total number of employees in receipt of qualifying general earnings comprised in the PSA;
F5d
the number of those employees respectively chargeable to income tax—
i
at only the basic rate for the tax year to which the F9computation relates, and
ii
at both the basic rate and the higher rate for that tax year; F1and
iii
at the basic, higher and additional rates for that tax year;F11and
F17v
at any Welsh rate applicable for the tax year to which the computation relates;
e
such other matters as are agreed by F4HMRC and the employer to be relevant in relation to the qualifying general earnings comprised in the PSA.
3
The amounts specified for the purposes of F10paragraph (1A)(b) are—
a
an amount equal to income tax on the aggregate of the amounts computed in accordance with paragraph (2)(a) and (b), calculated so as to take account of the factor specified in paragraph (2)(d); and
b
a further amount reflecting an estimate of the income tax on the benefit to the employees of having no tax liability on the qualifying general earnings included in the PSA.
Payment of tax and recovery proceedingsI2109
1
2
3
Part 6 of TMA (collection and recovery) applies to the recovery of the aggregate amount or any part of it (“the amount of tax”) as if it were income tax charged on the employer.
4
But summary proceedings for the recovery of the amount of tax may be brought in England, Wales or Northern Ireland at any time before the expiry of 12 months beginning with the due date.
5
Proceedings may be brought for the recovery of the amount of tax without distinguishing the amounts which the employer is liable to pay in respect of each employee under the PSA and without specifying the employees in question.
6
The amount of tax is one cause of action or one matter of complaint for the purposes of proceedings under sections 65, 66 and 67 of TMA50 (magistrates' courts, county courts and inferior courts in Scotland).
Formal determination of tax payable by the employerI3110
1
This regulation applies if it appears to the Inland Revenue that there may be an amount payable under regulation 109(1) for any tax year which has not been paid by the due date (as defined by regulation 109(2)).
2
The Inland Revenue may determine the amount payable to the best of their judgment.
3
If a determination is made, the Inland Revenue must serve notice of it on the employer.
4
A determination under this regulation is subject to Parts 4, 5 F3, 5A and 6 of TMA (assessment, appeals, collection and recovery) as if—
a
the determination were an assessment, and
b
the amount determined were income tax charged on the employer,
and those Parts of TMA apply accordingly with any necessary modifications.
F25
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