EIM47181 - Finance Act 2018: schedule 1: 2019 loan charge: offshore employer

ITEPA 2003 – Section 689

Where a third party takes a relevant step in relation to an employee who has a non-UK based employer, the provisions of section 689 normally apply to require the employee’s end user or another UK based third party to operate PAYE on the value of the relevant step.

For the purposes of the 2019 loan charge, however, this requirement is disapplied. Where an employee has a non-UK employer and the relevant step is one which arises because of the application of the loan charge provisions, there will be no requirement on a UK entity to operate PAYE. The employee will have to include the value of the loan charge relevant step in their personal tax return.