EIM47100 - Loan charge relevant step: interaction with section 222 charge for original loan or quasi-loan

Schedule 11 F(No 2)A 2017

Where an employer has to account for an amount of PAYE for the 2019 loan charge, the income on which that is based is a notional payment for the purposes of section 710 ITEPA 2003 and the PAYE regulations.

Since it is a notional payment, the provisions of section 222 will apply. Section 222 will apply where there is any requirement on an employer or end user to account for an amount of PAYE as a result of any Pt 7A relevant steps or the making of any other notional payments.

Where an amount of income overlaps both the loan charge and any earlier charges to tax, it is necessary to consider how section 222 should be applied. Section 554Z11G applies to reduce the amount on which any liability under section 222 arises, to the extent that it has been franked by a payment against an overlapping liability (see EIM46101).