Company loan

NorthernHome1

Hi all,

Looking for some advice on tax on loans. My work has agreed to loan me 20k to help me buy and renovate a family home, the payment will taken from my wage over 5 years. However I think I will have to pay tax as its a payment in kind is this correct?

Also how will I pay the tax on the loan will it be taken out of my tax code over the 5 years or in one lump sum?

Thanks

flashg67

this might help - https://www.employeebenefits.co.uk/issues/november-2015/45-back-to-basics-on-tax-free-loans/

Generally, any tax is taken by reducing your tax code, unless you already do a tax return for other reasons/income

TrickyDicky101

Is your employer proposing to charge you interest on the loan or will you simply be paying back the exact amount borrowed?

[Deleted User]

The current official interest rate is 2.5%. If you are not charged less than that there is no BIK.

Fcuktheworld

Is this a contractor thread?

dresdendave

Have you considered the implications if you wish to move jobs during the course of the loan period. Would you have to make immediate repayment, would it revert to a higher non-staff APR?


Hopefully the above won't apply but please check, or otherwise you could effectively be trapped in a job and miss out on better opportunities elsewhere.