Loan to employee from company - repayment?

[Ali123]

Hi all,

If i was to pay an employee 2k as a loan (under the limit so its not benefit in kind) .

Can the repayment be for any x number of years, or does it have to be paid back by the employee to the company in a certain amount of time in order for it NOT to be a benefit in kind.

Thank you.

Ali

 

[Energise Accounting]

The best way to do this is give him an advance on his wages.

 

[UK Contractor Accountant]

It will be regarded as a loan until such time as it is repaid or written off. You need to document the loan in the form of a loan agreement wich specifies the rate of interest (maybe 0%) and the due date for loan repayments.

Excessive loan periods may come under the challenge of hmrc as disguised remuneration.

 

[MyAccountantOnline]

Hi all,

If i was to pay an employee 2k as a loan (under the limit so its not benefit in kind) .

Can the repayment be for any x number of years, or does it have to be paid back by the employee to the company in a certain amount of time in order for it NOT to be a benefit in kind.

Thank you.

Ali

Hi Ali

I've certainly never seen anything in the taxes legislation or in HMRC guidance material which specifies the maximum period a single loan can remain outstanding.

How long are you considering giving this loan to an employee for?

 

[Energise Accounting]

I am sure you have asked this question before, and you said it was a advance on an employees wages.