HMRC’s Call for Evidence on PAYE Settlement Agreements (PSAs), issued in June 2026, seeks views on whether the PSA regime remains fit for purpose given evolving work patterns, the rise of flexible benefits, and increased remote working. PSAs allow employers to settle tax and NIC on minor, irregular, or impracticable benefits and expenses via a single annual agreement, avoiding individual P11D reporting. KPMG’s response argues that the current regime’s rigid categorization of benefits fails to accommodate modern practices such as homeworking allowances, wellbeing subscriptions, and global mobility benefits. The firm recommends expanding the scope of eligible benefits, introducing a digital PSA portal, and allowing multi-year agreements to reduce administrative burden.
Key Takeaways
- Regime Outdated for Modern Work: The PSA’s ‘minor, irregular, impracticable’ criteria do not align with recurring flexible benefits like monthly wellness stipends or co-working space access.
- Digital Transformation Needed: A real-time digital PSA management system would improve accuracy, reduce errors, and enable HMRC risk-based compliance checks.
- Global Mobility Inclusion: Benefits provided to internationally mobile employees (e.g., tax equalization, relocation) should be explicitly permitted within PSAs to simplify compliance.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement