We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Interest free loan from employer
bigfoot371
Posts: 49 Forumite
Hi,
I've had a job offer where I am offered an interest free loan (£5000) as I will not receive a company car / car allowance.
I cannot work out the tax situation after reading the HMRC website and a lot of google.
Are repayments made from my net salary, or my gross (i.e. Is it a pre or post tax deduction?).
Can anyone clarify?
I've had a job offer where I am offered an interest free loan (£5000) as I will not receive a company car / car allowance.
I cannot work out the tax situation after reading the HMRC website and a lot of google.
Are repayments made from my net salary, or my gross (i.e. Is it a pre or post tax deduction?).
Can anyone clarify?
0
Comments
-
bigfoot371 wrote: »Hi,
I've had a job offer where I am offered an interest free loan (£5000) as I will not receive a company car / car allowance.
I cannot work out the tax situation after reading the HMRC website and a lot of google.
Are repayments made from my net salary, or my gross (i.e. Is it a pre or post tax deduction?).
Can anyone clarify?
The unsatisfactory answer is 'How is your employer collecting the loan? From your gross pay or from your net pay? ' You really need to ask them.
If you let us know we can work out the effect on your net pay.There are 10 types of people in the world - those who understand binary and those who do not. :doh:0 -
there is no tax implication. You'll just repay 1/12th (or 10 equal payments like my work does) back out of your net salary0
-
I think repayments would be taken out of your net salary. As the loan is below £10,000, this will not be seen as a benefit in kind. The impact will to reduce your income by the amount taken each month. The advantage is that you will not need to pay interest on the loan.0
-
I think repayments would be taken out of your net salary. As the loan is below £10,000, this will not be seen as a benefit in kind. The impact will to reduce your income by the amount taken each month. The advantage is that you will not need to pay interest on the loan.
That would be the norm. Nevertheless I have come across employers who have deducted the repayments through salary sacrifice. I have never really explored the legitimacy of this option.There are 10 types of people in the world - those who understand binary and those who do not. :doh:0 -
I think the rationale on allowing these to be a tax free benefit in kind was to allow for season ticket loans for rail fares, but there's no stipulation as to what they should be used for.
Using this via salary sacrifice sounds against the spirit of the concept to my mind, whether legitimate or not.'I want to die peacefully in my sleep, like my father. Not screaming and terrified like his passengers.' (Bob Monkhouse).
Sky? Believe in better.
Note: win, draw or lose (not 'loose' - opposite of tight!)0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.1K Banking & Borrowing
- 253.6K Reduce Debt & Boost Income
- 454.2K Spending & Discounts
- 245.1K Work, Benefits & Business
- 600.7K Mortgages, Homes & Bills
- 177.5K Life & Family
- 258.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards