Notional Loan by Employer for attending Course

paul2013

Hello everyone I am new to this forum. I have a question for Notional Loan and would appreciate if someone can direct me to the right direction.

Recently I have been sent to 2 courses by my employer and I have been told that I will have to sign a NOTIONAL LOAN agreement, which states the total amount paid for my courses along with my wages paid for those days and should I decide to resign within next 24 months I will have to pay back certain amount to my employer.

My question is why my employer is added VAT @ 20% to the course fees even if they are claiming it back from Inland revenue and also should I get any tax break since it is a kind of study loan.

Will appreciate any advise relevant to my question or if there is anything else I need to know before I sign it.

Cheers

happycamel_2

If your firm is VAT registered then it should be ex-VAT. I'm not sure what you mean by tax break but it won't affect your income tax or national insurance.

antrobus

paul2013 wrote: »

...My question is why my employer is added VAT @ 20% to the course fees even if they are claiming it back from Inland revenue ....

Presumably because, where you to resign within next 24 months and be required to repay the course fees, your employer would be deemed to have supplied the course to you and VAT would be payable on that supply.

paul2013

happycamel wrote: »

If your firm is VAT registered then it should be ex-VAT. I'm not sure what you mean by tax break but it won't affect your income tax or national insurance.

Thanks. I meant to ask if anyway it would affect my Income tax or NI, which you have already answered.

pompeyred

I disagree with the advice so far.

If your employer is VAT registered then the total cost to them will be course cost minus VAT. The bit I disagree with is the bit that I don't know and which I think is important to understand: "Has the employer added VAT to the final course fees charged by the providing organisation, and for which would normally already be included in the total invoice from the provider and/or is the VAT element also on top of the wages etc....?"

At which I would question how the suggestive value has been created. That said I am happy to be told that there is no chance you will be leaving within the 2 years and the question was around if you had tax breaks which you have said has already been answered

Thrugelmir

paul2013 wrote: »

Will appreciate any advise relevant to my question or if there is anything else I need to know before I sign it.

Cheers

Employer merely wishes to enjoy the benefit of the money its expending. The fact they are investing in you suggests that consider it worthwhile.