If your business has a PAYE Settlement Agreement (PSA), there are two things to deal with this autumn. You need to tell HMRC the value of the items covered by your PSA, and you need to pay the PSA tax and Class 1B National Insurance for 2025/26.
HMRC has also made one point clearer this year: you must tell it the value of your PSA items even if you provided no benefits or expenses. Here’s what that means in practice.
Key points
- PSA tax and Class 1B National Insurance for 2025/26 are due by 22 October 2026 if you pay electronically, or 19 October 2026 if you pay by post.
- On 6 October 2026 HMRC clarified that you must tell it the value of PSA items even if you provided no benefits or expenses. HMRC calls this a nil return.
- A PSA is one way employers cover the tax on things like staff events that don’t qualify for the £150 exemption.
- If you’re not sure what to send HMRC, talk to us before the payment date.
On this page
What’s due and when
For 2025/26, the tax and Class 1B National Insurance due under your PSA must be paid by:
- Thursday 22 October 2026 if you pay electronically; or
- Monday 19 October 2026 if you pay by post.
Paying by post gives you three fewer days, so allow for that. GOV.UK explains how to pay on its Pay a PAYE Settlement Agreement page.
Nil returns: when there’s nothing to report
On 6 October 2026 HMRC clarified its guidance. You must tell HMRC the value of the items in your PSA even if you provided no benefits or expenses. HMRC calls this a nil return.
So if you still have a PSA but nothing it covers was provided in 2025/26, don’t assume there’s nothing to do. HMRC still wants to hear from you.
HMRC’s guidance is on GOV.UK: Tell HMRC the value of items in your PAYE Settlement Agreement.
HMRC asks employers to send the PSA calculation (the value of the items) by 31 July after the end of the tax year. For 2025/26 that was 31 July 2026. If you haven’t sent yours yet, send it now, and still pay by 22 October. HMRC expects payment by the due date even if it hasn’t processed your calculation. If HMRC doesn’t get the details, it can work out the amount itself, and you could be charged more.
Where a PSA fits in
A PSA is one way employers cover the tax on things like staff events that don’t qualify for the £150 exemption for annual functions.
With the festive season coming up, it’s a good moment to look at what you’re planning for your team and whether your PSA still covers what you expect it to. We’re happy to go through it with you.
A short checklist before 22 October
- Find your PSA paperwork.
- List what you provided in 2025/26 that falls under your PSA. If the answer is nothing, you still need to send HMRC a nil return.
- Tell HMRC the value of the items, following the GOV.UK guidance.
- Pay the tax and Class 1B National Insurance by 22 October 2026 electronically, or 19 October 2026 by post. Use your PSA reference, not your PAYE Accounts Office reference.
- Keep a note of what you sent and when.
Sources
Our main sources are HMRC and GOV.UK:
- Tell HMRC the value of items in your PAYE Settlement Agreement
- Pay a PAYE Settlement Agreement
- GfC1: help with PAYE Settlement Agreement calculations
Talk to us about your PSA
If you have a PSA and aren’t sure what to tell HMRC, or whether it still covers what you provide, we can help you work through it. Call us on 020 7164 0225, send us a WhatsApp message or email your tax enquiry to hello@ibandco.co.uk.
See also our payroll management and Business Tax Advisory services.
Checked on 9 October 2026. The Budget on 28 October 2026 may change some of these rules and rates. We plan to review this post after the Budget. Please check with us before acting.
Please note: this article is general information based on our understanding of UK tax rules at the date shown above. It is not advice for your circumstances, and tax rules and rates can change. Please speak to us before acting on it.
Ishmael Bangura FFA
Ishmael Bangura FFA is a qualified tax adviser and Fellow Financial Accountant with a finance degree and about 15 years’ experience, including earlier corporate roles. He has helped more than 950 clients. IB&Co Accountants is regulated by the IFA and IPA. IB&Co is based at Level 37, 1 Canada Square, Canary Wharf.
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