HMRC has published new guidance for individuals and employers on reporting details of disguised remuneration loans outstanding at 5 April 2019 and accounting for loan charge liabilities. While the loan charge only applies to balances outstanding in the tax year 2018/19, it can include disguised remuneration loans received since 5 April 1999.
The guidance sets out the main types of loan schemes and the particular reporting requirements for each type of scheme. These are:
For employed and contractor schemes, it is the responsibility of employers to account for and pay the loan charge on behalf of individual scheme users through PAYE. The individual is responsible for reporting details of outstanding disguised remuneration loans to HMRC, as well as giving these details to the relevant employers by 15 April 2019. Third parties who make loan payments, such as trustees, must also provide this information to the employers.
Employers should report details of outstanding loan balances through RTI, using an earlier year update (EYU) submission, available from 20 April 2019.
If the relevant employer no longer exists, or is not based in the UK, responsibility transfers to the individual, who must provide HMRC with details by 1 October 2019 and pay the loan charge through their self-assessment return.
For trade-based schemes, individuals must include details of outstanding disguised remuneration loans on their self-assessment returns, showing them as ‘disguised remuneration additions to profits’. If the trade for which the loans were received ended before 6 April 2018, the loan amounts should be treated as trade profits earned in the tax year in which the trade ceased.
The guidance lists certain types of repayments that will be disregarded for the purposes of reducing loan balances. In the case of employed schemes, disregarded payments will include those:
For trade-based schemes, disregarded repayments will include those:
Repayments made in a depreciating currency will only count up to the sterling value of that repayment.
See Report and account for your disguised remuneration loan charge, bit.ly/2StLVu3.
HMRC has published new guidance for individuals and employers on reporting details of disguised remuneration loans outstanding at 5 April 2019 and accounting for loan charge liabilities. While the loan charge only applies to balances outstanding in the tax year 2018/19, it can include disguised remuneration loans received since 5 April 1999.
The guidance sets out the main types of loan schemes and the particular reporting requirements for each type of scheme. These are:
For employed and contractor schemes, it is the responsibility of employers to account for and pay the loan charge on behalf of individual scheme users through PAYE. The individual is responsible for reporting details of outstanding disguised remuneration loans to HMRC, as well as giving these details to the relevant employers by 15 April 2019. Third parties who make loan payments, such as trustees, must also provide this information to the employers.
Employers should report details of outstanding loan balances through RTI, using an earlier year update (EYU) submission, available from 20 April 2019.
If the relevant employer no longer exists, or is not based in the UK, responsibility transfers to the individual, who must provide HMRC with details by 1 October 2019 and pay the loan charge through their self-assessment return.
For trade-based schemes, individuals must include details of outstanding disguised remuneration loans on their self-assessment returns, showing them as ‘disguised remuneration additions to profits’. If the trade for which the loans were received ended before 6 April 2018, the loan amounts should be treated as trade profits earned in the tax year in which the trade ceased.
The guidance lists certain types of repayments that will be disregarded for the purposes of reducing loan balances. In the case of employed schemes, disregarded payments will include those:
For trade-based schemes, disregarded repayments will include those:
Repayments made in a depreciating currency will only count up to the sterling value of that repayment.
See Report and account for your disguised remuneration loan charge, bit.ly/2StLVu3.