Benficial Loans

System

The ex-employee of a registered charity left without repaying a loan of some £5500. As per the original agreement when the interest free loan was made some years ago, it was accepted that £4600 should have been written off a couple of years ago. The balance of £900 he has refused to pay, and legal action to recover is inappropriate under the particular circumstances, and will have to be written off.<BR><BR>How is all this treated in terms of PAYE. Is the employer liable for Tax and NI, which no doubt the employee will refuse to reimburse ? <BR><BR>Inland Revenue have been unable to answer this query, suggesting details be submitted with the P11D.