Loan to employee
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Sykes66
Registered Posts: 14 New 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.
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.
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Comments
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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.0
