From April 2018, the annual process for renewing PPE contracts has been simplified, so employers are not required to agree to a PSA with HMRC each year if the categories remain the same. Under the agreement, the EPI will remain in place until the employer or HMRC terminates or amends it. You must continue to use a payment reference, even if HMRC has not sent you a confirmation letter. Fortunately, there is a payment reference in the HMRC letter that is attached to your counter-signed P626, the letter by which the agreement came into effect. Although it is not tax, it is unique to each employer and HMRC has therefore confirmed to us that it can be used in this situation. This is in format XX0000123456789. They must submit an annual calculation of the income tax payable and the Class 1B NIC. HMRC will verify the calculation and confirm the consent if the basic calculation appears to be correct. PAYA compensation agreements (PAYA) are often used by employers to maintain compliance with employee cost and social benefits procedures. By entering into this formal agreement, an employer can pay any tax due on expenses and benefits to workers through an annual submission and payment to the HMRC.
If you do not have an PPE yet and miss this deadline, it is possible to make a voluntary disclosure and a tally of items that you would otherwise have included in an EPI. However, in certain circumstances, HMRC may impose penalties and collect interest on amounts paid in this way. The value of the services provided should be taxed under the EPI at the marginal tax rates of each worker concerned. It is therefore important that tax rates for workers residing in each of the UK countries are also taken into account, as deceded governments (currently Scotland and Wales) are able to set the tax rates payable by taxpayers based in those countries. PAYE Billing Agreements (PAYA) are voluntary agreements that allow employers to pay taxes and social security contributions (NIC) on behalf of their employees. They are also useful when reporting benefits on P11D forms would be administratively binding. An EPI can also help reduce employer management by removing and replacing the requirement to include certain taxable expenses/benefits in employeeS` P11Ds with an annual comparison of HMRC. Articles contained in an EPI should not be reported separately, for example. B on the payroll or in the employee`s P11D. Instead of being taxed on the worker through the P11D process, they are taxed through this annual compensation to the employer.