Loan to employee

Sykes66 Registered Posts: 14 Regular contributor ⭐ 😼 ⭐
I wondered if somebody could advise on the employee loan agreement please?

We have an employee that would like to take a loan from the company for between£10-25k.
The company do not want to make a charge for the loan (interest) and the company is happy for this to be repaid over a period of 3 years or more if allowed.

Has anybody done this and if so what pointers can you offer.

Many thanks in advance.


  • Jagz1234
    Jagz1234 Registered Posts: 13
    If you do not charge interest it is a benefit in kind unless the loan value never exceeds £10k.

    If the loan is being used for a qualifying purpose then employee is allowed a deduction against employment income for the BIK value therefore net effect nil.

    If this is a loan sacrafice it complciates things.
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