Interest free loan from employer

TheBanker

boo_star wrote: »

Yeah, I can't see an employer handing over 10k without asking to see proof that 10k is necessary, and asking for proof that it has been spent on that a few weeks/months later.

£10k is feasible if it's a commute into London, with a tube ticket and parking at the station.

But like everyone else's employer, my employer insists on seeing a copy of the receipt and will take action if the loan has been used for anything else. There are tax implications too.

Some employers also buy the ticket for you, or issue the loan as a cheque payable to the train company, in which case there is no viable way you could use it for something else.

gingercordial

As far as HMRC are concerned it doesn't matter what the loan is for. An employer can give an employee an interest-free loan of up to £10k for anything the employee likes, and it will not be a benefit in kind and does not need to go on a P11D.

However most employers only give out loans for season tickets for travel. This is the employer's rule, not HMRC's. Everywhere I've ever worked has had this rule. Of the four jobs I've had, three have provided me with a cheque made out to the travel company (for me, London Underground) and therefore I had no opportunity to access the money for any other use. The other did give me the money to my bank but required proof of payment to London Underground.

OP is therefore unlikely to get this loan from their employer unless they're one of the very rare ones which doesn't enforce what it's used for.

Quite aside from whether or not the plan is a good idea!