HMRC’s call for evidence on PSAs is the latest in a series of developments relating to the tax compliance reporting of employee benefits and expenses. Alongside the phased introduction of mandatory payrolling of benefits in kind (PBIK) from April 2027, it signals HMRC’s continued focus on how employers report, calculate and govern benefits and expenses compliance.
PSAs are voluntary arrangements that allow employers to settle income tax and Class 1B National Insurance contributions on certain benefits and expenses on behalf of employees, rather than reporting those items through payroll or on Form P11D. They are commonly used for items that are minor, irregular or impracticable to allocate to individual employees.
The call for evidence, which closes on 15 September 2026, asks how PSAs operate in practice, how employers decide what to include, and whether the current framework is clear, consistent, and proportionate. HMRC have stated that the exercise is not about changing how benefits and expenses are taxed, but it may inform future changes to PSA guidance, processes or compliance expectations.This makes the call for evidence an issue for employers to be aware of. It provides an opportunity to explain where PSAs work well, where they create practical challenges, and what changes could support proportionate compliance while preserving useful flexibility.
