Bespoke Tax Accountants

Specialist tax advice, accountancy and tax returns

01242 505970
info@bespoketax.com

  • Home
  • About Us
    • Meet The Team
    • Careers
    • Statutory Information
    • Privacy Policy
  • Who We Help
    • Personal and Family
    • Business
    • Our Clients
  • News
    • Making Tax Digital
  • Giving Back
  • Contact
  • Cloud Accounting
    • Xero

Exempt beneficial loans

8th April 2021 By bespoketax

Exempt beneficial loans

An employee can obtain a benefit when provided with an employment-related cheap or interest-free loan. The benefit is the difference between the interest the employee pays, if any, and the commercial rate the employee would have to pay on a loan obtained elsewhere. These types of loans are referred to as beneficial loans.

There are a number of scenarios where beneficial loans are exempt and employers might not have to report anything to HMRC or pay tax and National Insurance. The most common exemption relates to small loans with a combined outstanding value to an employee of less than £10,000 throughout the whole tax year. 

The list also includes loans provided:

  • in the normal course of a domestic or family relationship as an individual (not as a company you control, even if you are the sole owner and employee)
  • to an employee for a fixed and invariable period, and at a fixed and invariable rate that was equal to or higher than HMRC’s official interest rate when the loan was taken out
  • under identical terms and conditions to the general public as well (this mostly applies to commercial lenders)
  • that are ‘qualifying loans’, meaning all of the interest qualifies for tax relief 
  • using a director’s loan account as long as it’s not overdrawn at any time during the tax year.

Filed Under: Employee Benefits

Recent News

  • Termination payments
  • Bona Vacantia – dissolved companies
  • Reminder of compensation limits for bank deposits
  • Reminder that the plug-in grant has ended

News Categories

  • Budget Summary
  • Business
  • Business Support
  • Capital allowances
  • Capital Gains Tax
  • Company Secretarial
  • Construction Industry Scheme
  • Corporate Governance & Regulation
  • Corporation Tax
  • Customs Duties
  • Duties
  • Employee Benefits
  • Employment & Payroll
  • Employment Law
  • European Union
  • Family Tax Credits
  • General
  • HMRC notices
  • Income Tax
  • Inheritance Tax
  • National Insurance
  • NIC & Pensions
  • Other duties
  • Overseas personal tax issues
  • Overseas tax issues
  • Payroll
  • Pension
  • Personal
  • Practice News
  • Stamp duty
  • Stamp Duty Land Tax
  • Tax credits
  • Tax Diary
  • Value Added Tax
  • VAT & Duties

About Us

Bespoke has a reputation for helping our clients make the most of their financial situations and in turn we have become a trusted extension of their business or family.

Bespoke assist with compliance requirements, providing specialist tax advice, and planning for now and the future.

Keep informed.
Sign up for our Topical Newsletter

Our FREE monthly newsletter will keep you up to date with the latest news related to the world of accountancy.

Register Here

Contact

Delta Place,
27 Bath Road, Cheltenham,
Gloucestershire, GL53 7TH
01242 505970
info@bespoketax.com

ICAEW Chartered AccountantsXERO Gold PartnerChartered Institute of TaxationMember of EISA

Copyright © 2022 · Bespoke Tax Accountants · Website by Culpepper & Co

.