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Employee loans: law and HMRC rules


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Some employers offer their employees low interest or interest-free loans.  This page provides information on the different types of loans that employers may make and their tax treatment. Contents include loans to employee shareholders, short-term loans and advances, loans without tax liability, those that are written off and interest.

What is an employee loan?
Employee loans are not liable to PAYE tax, but may be taxable as a benefit under Part 3, Chapter 7 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) if the loan is more than £10,000.00 during the tax year.
HMRC r...

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