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Once a PSA is agreed (via an employer's online account or by HMRC receiving the signed P626) the employer is no longer required to operate PAYE or pay Class 1/1A NICs on the benefits and expenses included in the PSA or include those benefits and expenses on forms P11D and P11D(b).

However an employer has to keep a suitable record of any items given to the individuals. »Ê¹ÚÌåÓýappse records will normally be the same as those which the employer keeps anyway for his own accounting purposes.

If employers cannot identify which employee received a particular expenses payment or benefit (for example, which employees made use of the company’s free chiropody service) the employer need only keep a record of

• the overall cost of providing the items in question
• the number of employees who received them, and
• an indication of what rate of tax they pay.

Records must be kept for a minimum of 3 years.