108.—(1) A PSA must provide for the sums in respect of income tax for which an employer is to be accountable to the Board of Inland Revenue under the PSA—
(a)to be computed in accordance with the factors specified in paragraph (2), and
(b)to be 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;
[F1(d)the number of those employees respectively chargeable to income tax—
(i)at only the basic rate for the tax year to which the PSA relates, and
(ii)at both the basic rate and the higher rate for that tax year;][F2and
(iii)at the basic, higher and additional rates for that tax year;]
(e)such other matters as are agreed by [F3HMRC] 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 paragraph (1)(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.
Textual Amendments
F1Reg. 108(2)(d) substituted (6.4.2008) by The Income Tax (Pay As You Earn) (Amendment) Regulations 2008 (S.I. 2008/782), regs. 1, 12(a)
F2Reg. 108(2)(d)(iii) and word inserted (6.4.2011) by The Income Tax (Pay As You Earn) (Amendment) Regulations 2011 (S.I. 2011/729), regs. 1, 14
F3Word in reg. 108(2)(e) substituted (6.4.2008) by The Income Tax (Pay As You Earn) (Amendment) Regulations 2008 (S.I. 2008/782), regs. 1, 12(b)
Commencement Information