13th December 2018

For the 2018/19 tax year, the PSA form is changing to include calculations for Scottish Taxpayers.

As the idea behind the PSA is to allow an employer to settle an employee’s liability on certain benefits, you will have to determine whether you have any Scottish taxpayers (those with an ‘S’ prefix in their tax code) in order to calculate the correct amount of taxes due on their PSA.

The PSA 1 form has been updated to reflect the separate tax systems. If you are completing the forms yourself you will now be asked whether the ‘expense or benefit’ is for a Rest of the UK taxpayer or a Scottish taxpayer, this will allow you to provide PSA details using the rates and threshold for Scottish Income Tax.

What Employers Need to Do

It is recommended that you review the way in which you, as an employer, capture PSA data throughout the year. It may be practical to identify and separate the costs of those benefits you provide to Scottish taxpayers and those you provide to Rest of the UK taxpayers during the year, as you will need to record them separately on the PSA form and a share of the tax paid under a PSA for Scottish taxpayers will be paid over to the Scottish Government.

For more information on any employment tax related matters please contact either: Lee Muter, Employment Taxes Partner, on 0191 243 6089 or at leemuter@unw.co.uk; or Rebecca Kemp, Employment Taxes Consultant, on 0191 243 6070 or at rebeccakemp@unw.co.uk

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