NIM18030 - Class 1B NICs : Liability : What does a PSA cover?
To be included in a PSA an expense payment or benefit must be:
- minor
- long service awards which do not satisfy the conditions in section 323 ITEPA 2003 (previously ESC A22)
- incentive awards
- reimbursement of late night taxi fares home which do not satisfy the conditions in section 248 ITEPA 2003 (previously ESC A66)
- incidental overnight expenses in excess of the statutory daily limit
- present for an employee in hospital
- staff entertainment – for example a ticket for Wimbledon
- use of a company van
- use of a pool car where the conditions for tax exemption are not satisfied
- subscriptions to gyms, sports clubs, etc.
- telephone bills
- gift vouchers and small gifts.
- irregular
- relocation expenses where the amounts concerned exceed the £8,000 tax exemption threshold
- occasional attendance at an overseas conference where not all the expenses qualify for tax relief
- expenses of a spouse occasionally accompanying an employee abroad
- occasional use of a holiday flat
- one-off gifts which are not minor.
Items provided to the same employee every year are unlikely to satisfy the irregular test.
- an expense or benefit for which it is impracticable to operate PAYE or determine a value for P9D or P11D purposes
- free chiropody care
- hairdressing services
- Christmas parties and other similar entertainment provided by the employer which do not already qualify for tax relief
- the cost of shared taxi fares home which do not satisfy the conditions in section 248 ITEPA 2003 (previously ESC A66)
- shared cars.
The employer will be expected to show that it is impracticable to operate PAYE on a payment, or to identify how much of a shared benefit should be attributed to each employee.
The above lists are for illustration purposes only and are not exhaustive.
