NHS-focused support for expenses & benefits: P11D, PSA and payrolling benefits. Practical compliance, clear processes and audit-ready evidence.
NHS organisations typically provide a range of benefits in kind and reimburse expenses across diverse staff groups. Without clear rules and reliable processes, obligations can be missed and liabilities can escalate quickly. We help Trusts, ICBs and arms-length bodies set up practical controls for benefits and expenses—so you remain compliant, staff are treated fairly and the evidence stands up to internal/external audit and HMRC.
What needs to be managed
Benefits and reimbursed expenses that are not fully covered by an exemption create an obligation to account for tax and National Insurance. Depending on the benefit and your chosen route, that may be via annual P11D forms (with tax collected through coding), via a PAYE Settlement Agreement (PSA) where the organisation bears the tax/NIC for eligible items, or via payrolling of benefits. From 6 April 2027, payrolling most benefits is due to become mandatory (subject to final HMRC specifications and guidance). NHS bodies should prepare now to avoid year-end bottlenecks and to ensure records and data flows are ready.
Our approach
We start by mapping what benefits you provide, how information moves from providers and departments to payroll, and how exceptions are handled. We then confirm which items are exempt, which should be reported, and where a PSA is appropriate. For Trusts moving to payrolling, we help design a practical process: registration/notifications, valuation methods (including salary sacrifice), data timetables, payroll configuration and pre-submission checks. Where HMRC is already engaged, we prepare your position, quantify exposures and support proportionate disclosure and remediation.
National Minimum Wage (NMW) interactions with salary sacrifice are covered in NMW for the NHS.
Outcomes
Clear, documented policies and responsibilities. Fewer late corrections. Valuations and records that are ready for audit and HMRC review. Staff communications that reduce queries and improve understanding of tax codes, payrolled items and year-end statements.
Typical deliverables
- P11D/PSA policy pack tailored to NHS roles and scenarios, with guidance for managers and payroll.
- Payrolling benefits framework: valuation rules, data timetables, RTI checks and evidence logs.
- Sampling and evidence packs for year-end, with a remediation plan where issues are found.
- Targeted training for payroll/HR/benefits leads; practical briefing notes for line managers.
- Employee communications: templates explaining how benefits are taxed, and what to expect on payslips/tax codes.
Next steps
If you would like a focused review, we can confirm priority risks, set immediate actions and provide a realistic implementation timetable aligned to your payroll cycles.
Go to: Employment Taxes for NHS Organisations (hub) · IR35 for NHS · NMW for NHS · VAT Services (hub)
NHS Expenses & Benefits (P11D/PSA) FAQs
If all relevant benefits are payrolled correctly, P11Ds are not required for those items (except for benefits HMRC still excludes). Any non-payrolled items must still be reported.
Items that are minor, irregular or impracticable to attribute to individuals. Some benefits are excluded. We’ll confirm what is suitable for PSA and what should be exempted or reported instead.
HMRC intends to mandate payrolling most benefits from 6 April 2027 (final technical specs are pending). Preparing now—valuation rules, data timetables, RTI checks—reduces year-end risk.
Salary sacrifice changes the taxable value of certain benefits and can reduce cash pay. You must ensure NMW is still met after sacrifice; we’ll set controls to check this before payroll finalises.
Keep valuations, data feeds from benefit providers, payroll configuration notes, evidence of exemptions, PSA workings and staff communications. Retain for at least the statutory period and align with audit requirements.
Case Study 1
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News Article / link to PSTAX
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NHS-focused NMW support: deductions, unpaid time, salary sacrifice and rostering. Practical fixes and audit-ready evidence.
Meeting National Minimum Wage (NMW) obligations is challenging in NHS settings. Complex rotas, variable allowances, uniforms, training time and salary sacrifice arrangements can all affect whether pay meets the legal threshold. The financial and reputational consequences of getting it wrong are significant: arrears, penalties and sustained operational disruption. We help NHS organisations establish clear rules, apply them consistently and retain evidence that satisfies internal audit and HMRC.
Where risk typically arises
The most common pressure points include deductions for uniforms or equipment; treatment of unpaid time such as briefings, handovers or mandatory training; the impact of salary sacrifice on hourly pay; and elements of travel, subsistence and accommodation where costs are recharged. For bank and agency arrangements, the interplay between engagement terms, rostering systems and payroll cut-offs often creates gaps in documentation. A structured approach is required to prevent isolated errors becoming systemic non-compliance.
Our approach
We begin with a concise review to confirm scope, identify high-risk staff groups and map how data flows from rostering to payroll. We test representative samples against NMW rules and quantify any exposure. From there, we implement practical controls: clear policies on deductions and unpaid time; guidance for managers and payroll; and simple checklists that ensure issues are captured before pay is finalised. Where salary sacrifice is offered, we help design processes that protect NMW while maintaining staff benefits. If HMRC involvement has commenced, we prepare your position, evidence calculations and support proportionate resolution.
Outcomes
Greater certainty on compliance. Fewer retrospective adjustments. Clear documentation able to withstand internal/external audit and HMRC enquiry. A fair and consistent approach to staff, without accidental breaches caused by process gaps.
Typical deliverables
- NMW policy and guidance tailored to NHS workforce models.
- Controls for deductions, unpaid time and salary sacrifice with pre-payroll checks.
- Sampling methodology, evidence pack and remediation plan where needed.
- Targeted training for payroll, HR and line managers.
Next steps
If you would value a focused review, we can confirm priority risks, set immediate actions and provide a realistic implementation timetable aligned to your payroll cycles.
Go to: Employment Taxes for NHS Organisations (hub) · IR35 for NHS · Expenses & Benefits (P11D/PSA) for NHS · VAT Services (hub)
National Minimum Wage (NMW) NHS FAQs
Deductions for uniforms/equipment required for work, certain meal or transport charges, and other employer-required costs reduce pay for NMW purposes. Apply clear rules and pre-payroll checks.
Yes. Salary sacrifice reduces cash pay used in the NMW calculation. You must ensure hourly pay remains at or above NMW after sacrifice; build automatic checks into payroll.
Often yes. If time is required for the role, it typically counts toward hours for NMW. Capture and evidence policies on unpaid time and rostering.
Confirm how hours, allowances and deductions are captured from rostering to payroll. Use sampling to test representative groups and fix data gaps before pay is finalised.
Rostering exports, payroll inputs, deduction policies, salary-sacrifice agreements, sampling results and remediation actions. Retain in line with statutory/audit requirements.
NHS-focused IR35/off-payroll support: consistent determinations, robust controls and audit-ready evidence
IR35 (off-payroll working) is straightforward in principle yet complex in NHS practice. Trusts, ICBs and ALBs regularly engage locums, clinical specialists and interim managers through agencies or personal service companies. Decisions about status are often distributed across finance, HR and procurement, with varying documentation standards. We help NHS organisations make consistent determinations and retain evidence that satisfies internal and external audit, as well as HMRC.
See our Employment Taxes for NHS hub for related controls
What IR35 requires of NHS engagers
Where services are provided through an intermediary (for example, a personal service company), the engager must determine whether the engagement falls “inside” or “outside” IR35. The assessment is based on working practices as well as contractual terms – considering control, substitution and mutuality of obligation, alongside factors such as integration, financial risk and provision of equipment. For agency-supplied workers, responsibility for the decision can still rest with the Trust depending on contractual routes. A repeatable, documented process is essential.
Our approach
We begin with a concise discovery meeting to map current engagement routes – from initial request to payment – and identify where decisions, checks or records are missing. We then implement a practical framework that defines when IR35 applies, who is accountable at each stage, what assessment tools are used, and how atypical cases are escalated. We provide role-appropriate templates written for NHS use, guidance notes for managers and approvers, and briefing materials for agency partners to support consistent practice. Where HMRC is already engaged, we prepare the Trust’s position, explain historic decisions and work towards a proportionate resolution.
Outcomes
- A single, clear process for IR35 determinations.
- Consistency across departments and sites.
- Evidence that is ready for audit and HMRC review.
- Reduced onboarding delays and fewer disputes.
- Above all, confidence that workers are treated fairly and the organisation remains compliant.
Typical deliverables
- IR35 policy and workflow tailored to NHS engagements, with defined roles and approvals.
- Assessment template, guidance pack and record-keeping checklist suitable for audit.
- Targeted training for HR, procurement, finance and budget holders.
- IR35/OPW E-Learning modules for scalable training and HMRC compliance.
Next steps
If you would like a focused review of your current process, we can confirm priority risks, set out immediate actions and provide a realistic implementation timetable.
Go to: Employment Taxes for NHS Organisations (hub) · NMW for NHS · Expenses & Benefits (P11D/PSA) for NHS
IR35 for the NHS FAQs
The engaging organisation is responsible where services are provided via an intermediary (e.g., a PSC), even when workers are agency-supplied, depending on contractual routes. Your process should name accountable roles and escalation points.
Contract, statement of work, working-practices questionnaire, assessment outcome with rationale, approvals, and any agency correspondence. Keep records in a consistent format, time-stamped and accessible for audit/HMRC.
CEST can be part of the process, but outcomes should be checked against actual working practices and documented. Where CEST is inconclusive or facts are borderline, use a reasoned assessment and retain supporting evidence.
On material change (role, control, substitution, location, rota pattern) and at agreed periodic intervals for longer engagements.
Prepare a defensible narrative, collate evidence, quantify exposure and agree proportionate resolution. We support disclosure strategy and remediation planning.
Case Study – Trust-Wide IR35 Governance Refresh
Client: Acute NHS Trust
Situation: Mixed IR35 practices across departments led to inconsistent Status Determination Statements (SDS) and supplier friction.
Approach: Introduced a single, Trust-wide process with clear roles, simple documentation, and short manager briefings.
Outcome: Faster, consistent SDS decisions; fewer disputes; stronger audit confidence.
Case Study – Retrospective IR35 Look-Back & Fix
Client: Specialist NHS Provider
Situation: Internal audit highlighted gaps in historic IR35 decisions and documentation.
Approach: Completed a focused look-back review, corrected priority cases, and aligned contracts and onboarding for future engagements.
Outcome: Exposure understood and addressed; smoother supplier onboarding; improved assurance to Audit Committee.