Loans (Infotype 0045): National Features Great Britain

Definition

Infotype Loans (0045) contains two additional fields for the beneficial loans functionality for Great Britain:

  • Loan category

  • MIRAS indicator

These fields are used to specify the type of loan the employee has taken out, and whether MIRAS (Mortgage Interest Relief At Source) is applicable. Neither of these fields influence the regular payroll run. They exist for end-of-year reporting purposes only.

The MIRAS scheme was withdrawn from 06 April 2000. Mortgage interest relief is no longer available for beneficial loans of this type.

Use

Loan Category

There are seven different types of beneficial loans which must be reported on the P11D form:

Code

Purpose

Qualifying

A

Loan used for the purpose of a trade, profession, or vocation carried on by the employee/director

√

B

Loan for purchase of main residence

√

C

Loan for a purpose eligible for interest relief other than main residence

√

D

Loan not within A, B, or C above

E

Loan given as part of a relocation package

F

Reason not known

Z

Dispensation for P11D exemption

Loans are designated as being Qualifying or Non-Qualifying Loans. This attribute is needed to decide whether a specific loan should be taken into account when determining whether the total balance outstanding on an employee’s/director’s loans exceeds GBP5,000 in the current tax year, the tax exemption limit.

For more information, see Qualifying/Non-Qualifying Loans: Examples

MIRAS Indicator

Prior to April 2000, an employee was able to claim interest relief when provided with a cheap or interest-free housing loan , up,to a maximum threshold of GBP30,000.

The MIRAS scheme is now withdrawn, and this indicator must be left unset.

Integration

The Payroll component reads infotype Loans (0045) together with the Contract Elements (0016) infotype . The benefit calculation method is specified on infotype 0016 for the person concerned.

All of the employee's loans are then calculated by the method selected in infotype 0016.

Other information required by the Payroll component is held in tables. You can maintain the required information in the Implementation Guide (IMG), under: Start of the navigation path Payroll: Great Britain Next navigation step Beneficial Loans End of the navigation path , by carrying out the following three IMG activities:

  1. Maintain Loan Types

    You define the loan types to be used in your company, and the conditions under which the loan is granted.

  2. Set Up Official Rates

    Tax authorities publish the official rates at irregular intervals. You must therefore maintain the table Official rates for company loans (T5G70), as and when necessary.

  3. Check Constants

    The table Payroll Parameters (T511P) contains a constant LEXRT , which defines the limit of GBP5,000, up to which beneficial loans are tax free.

Information relevant to beneficial loans is also contained in the table Qualifying and non-qualifying loan categorisation (T5G71). This specifies whether a particular type of beneficial loan is a Qualifying or Non-Qualifying loan. No customizing is required.