can my employer settle my debt

candid_2

Hi new to here and this might have been covered, if it has then I apologise but I am trying to sound something out before I even think about it anymore.

Ok here goes. Lets say I have a loan and I wanted it settled but never had the funds to do it. Can my employer pay off my debt and I take a reduction in wages for a certain time. This would mean that my employer gets me on a reduced wage and saves money in the long run and I get my debt paid off, dont need to pay interest on the remaining loan and also I dont need to pay tax on the money they use to settle this loan.

for example. I need 30k to settle the loan, I take a reduction of 50k over five years and my company pays the 30k. Therefore reducing the amount I pay in interest and also tax and saving them 20k.

The way i see it is both parties win.

I am pretty sure it couldnt be that easy but I really dont know.

[Deleted User]

afaik a loan of this nature would be seen as a benefit in kind and still taxed,apart from that what security would the employer have?you could up and leave the next month...

R0bert_Sterling

You are truly living in Cloud Cuckoo Land!!!

Not only have you already buried yourself further in debt than you are EVER going to get out of... you want your employer to take that burden and pay it for you...

Of course the added bonus is that your employer can never sack you because he is taking some of your wages to repay the loan he lent you.

You have gone completely berzequack!!!!!!

Do you fall over for no apparent reason???

smartpicture

Actually, as an employer I did once lend a key employee £16,000 interest-free to buy a new car, as he couldn't get to work without it. We had a legal agreement drawn up that the full amount would become immediately repayable if he left the company for any reason, and if it was not paid, interest at a high rate would accrue from that date. We discussed it with the Inland Revenue first, and as far as I recall, I believe the taxman considered it as a benefit in kind and treated it as if it had a nominal interest rate of 5%, can't remember all the details.

However - we still paid tax on his full wages, and it would be asking for trouble for any employer to do otherwise, as they would be the one breaking the law. I would imagine that your employer would laugh you out the door if you made this suggestion.

candid_2

robert, who said I cant or couldnt get out of the debt.

I think no matter what you say that if it went through as a benifit in kind it would work out for both of us.

ILW

I cannot see what is in it or your employer.
Seems like paying your wages a few years in advance.

R0bert_Sterling

candid wrote: »

robert, who said I cant or couldnt get out of the debt.

You did....

candid wrote: »

Lets say I have a loan and I wanted it settled but never had the funds to do it.

And I still think you are completely loopy to expect your employer to burden themselves with the debts of your reckless spending.