Employee Loan and BIK

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in AAT member discussion
Please can someone help - have I got the rules correct?

An employee gets a 1 year interest free loan of £4,000.

Is this below the BIK threshold (I think yes!).

Secondly, if there is no BIK, does this negate the need to complete a P11?

Many thanks.

Claudia

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Employee Loan and BIK

    Well I guess youre going to want someones opinion that actually works in practice but my textbook for the Finance Act 2006 states:

    "No assessable benefit arises if the total amount outstanding on all beneficial loans made to an employee does not exceed £5,000 at any time during the tax year".

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Employee Loan and BIK

    As Adrian has said, the magic figure is £5,000. :)

    Regards

    Dean
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Employee Loan and BIK

    Can you confirm Dean that no P11D would be required then? (assuming no other assessable benefits)
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Employee Loan and BIK

    No P11D confirmed :) (assuming no other assessable benefits)

    Regards

    Dean
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Employee Loan and BIK

    Thanks guys - just wanted to check that I was right - I knew that the magic figure was less than £5,000 - and so therefore assumed that if there was no benefit in kind then no P11 was required - but we all know what the Revenue are like....

    Claudia

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