{"id":170,"date":"2017-05-02T00:00:00","date_gmt":"2017-05-01T23:00:00","guid":{"rendered":"http:\/\/duffyregan.wpengine.com\/index.php\/2017\/05\/02\/beneficial-loans-to-employees\/"},"modified":"2017-05-02T00:00:00","modified_gmt":"2017-05-01T23:00:00","slug":"beneficial-loans-to-employees","status":"publish","type":"post","link":"http:\/\/duffyregan.co.uk\/index.php\/2017\/05\/02\/beneficial-loans-to-employees\/","title":{"rendered":"Beneficial loans to employees"},"content":{"rendered":"<p>In many cases, making loans to your employees or their relatives can create an obligation to report a beneficial loan to HMRC. The deemed benefit would be a taxable benefit in kind for the relevant employee, and would increase the employer&rsquo;s Class 1A NIC bill at the end of the tax year.<\/p>\n<p>However, certain loans are exempt from this reporting obligation. These may include loans employers provide:<\/p>\n<ul>\n<li>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),<\/li>\n<li>with a combined outstanding value to an employee of less than &pound;10,000 throughout the whole tax year,<\/li>\n<li>to an employee for a fixed and never changing period, and at a fixed and constant rate that was equal to or higher than HMRC&rsquo;s official interest rate when the loan was taken out &ndash; the official rate for 2016-17 was 3%,<\/li>\n<li>under identical terms and conditions to the general public as well (this mostly applies to commercial lenders),<\/li>\n<li>that are &lsquo;qualifying loans&rsquo;, meaning all of the interest qualifies for tax relief,<\/li>\n<li>using a director&rsquo;s loan account as long as it&rsquo;s not overdrawn at any time during the tax year.<\/li>\n<\/ul>\n<p>Loans written off also create a National Insurance Class 1 charge. They must be reported on a P11D and the employer has an obligation to deduct and pay Class 1 NIC on the deemed value of the benefit.<\/p>\n<p>Calculating the taxable benefits for chargeable loans can be somewhat complex and readers are advised to take advice if they are unsure of their tax and NIC responsibilities.<\/p>\n<!-- -->","protected":false},"excerpt":{"rendered":"<p>In many cases, making loans to your employees or their relatives can create an obligation to report a beneficial loan to HMRC. The deemed benefit would be a taxable benefit in kind for the relevant employee, and would increase the employer&rsquo;s Class 1A NIC bill at the end of the tax year. However, certain loans [&hellip;]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-170","post","type-post","status-publish","format-standard","hentry","category-uncategorised"],"_links":{"self":[{"href":"http:\/\/duffyregan.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/170","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/duffyregan.co.uk\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/duffyregan.co.uk\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/duffyregan.co.uk\/index.php\/wp-json\/wp\/v2\/comments?post=170"}],"version-history":[{"count":0,"href":"http:\/\/duffyregan.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/170\/revisions"}],"wp:attachment":[{"href":"http:\/\/duffyregan.co.uk\/index.php\/wp-json\/wp\/v2\/media?parent=170"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/duffyregan.co.uk\/index.php\/wp-json\/wp\/v2\/categories?post=170"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/duffyregan.co.uk\/index.php\/wp-json\/wp\/v2\/tags?post=170"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}