Beneficial Loan from employer - Tax implication?

wdywuk

I'm looking to ask my employer about a 0% loan, but what would the tax implications be?

I've had a skim through the IR website, but by my reckoning as long as I have a defined repayment time (say 2 years) then there is no tax/NI liability.
Otherswise there is a BIK/NI'ers based on 5% of the loan amount each year.

The loan amount would be in the region of £20k.

The employer may go for it (I have to convince them! and yes they can afford it), as its only equivalent to paying me a years salary up front and they can deduct off my salary, and the loan can be repayable on demand.

Aark

If your employer gives you a loan of over £5,000 on interest-free terms there will be a taxable benefit calculated as the equivalent of 5% interest on the loan.

You will have to pay Income Tax on the benefit, and there will be a Class 1A NIC charge for your employer.