The deadline for paying the loan charge for employment related schemes such as Employee Benefit Trusts (EBT’s) and EFRBS is 19 April 2019 for cheque payments or 22 April for electronic payments.
The loan charge applies to all outstanding third party disguised remuneration loans made since 1999 unless a settlement has been reached with HMRC by 5 April 2019.
- Where the scheme is employment related the charge is due under PAYE by the employer company who originally undertook the scheme and the normal March PAYE payment deadlines apply.
- However HMRC have advised that the charge must be input under RTI as an earlier year update (EYU). It will be possible to do this using HMRC’s PAYE tools from 20 April 2019.
- The EYU process must be used as inputting the charge as a current period payroll amount will impact upon on the employee's net pay for that pay period.
- If the company is able to, they can deduct the tax from the employee under PAYE. Otherwise they must arrange for the individual to make good the tax (but not the NIC) by 5 July 2019 or further benefit in kind tax charges will result.
- Normal PAYE interest charges will apply to late payments. HMRC advise that employers who do not have enough funds available to pay the PAYE should contact them as soon as possible to discuss their options.
Where the scheme is a trade related contractor loan scheme the charge must be reported under self-assessment and paid by 31 January 2020.
Links to our guides:
Disguised Remuneration & Contractor loans
A guide to everything you need to know about disguised remuneration schemes, the loan charge, and how to reach a settlement with HMRC.
FAQs for disguised remuneration settlement
This guide looks at Frequently Asked Questions for settling Disguised Remuneration schemes. The FAQs relate to EBTs, EFRBS and contractor loan schemes (employed and self-employed).
Disguised remuneration final settlement opportunity
A detailed guide to the November 2017 final settlement opportunity for all disguised remunerations schemes.