Class 1A National Insurance contributions: Special Class 1A NICs cases: Beneficial loans: Method of calculating amount of interest: Alternative method: When an employer can use the alternative method
NIM16681 explains there are two methods for calculating the amount of interest chargeable to income tax on beneficial loans, the averaging and the alternative methods.
When an employer can use the alternative methodWhen calculating Class 1A NICs due on the amounts chargeable to income tax, the employer should only use the alternative method to calculate the interest if he knows that either
- the employee elected, or
- HMRC issued a notice to the employeeto use the alternative method before the date Class 1A NICs were due to be paid (see NIM13003). Otherwise the employer must use the averaging method, see