Rules, regulations and legislation governing tax in the UK (including as I write this on 9 September 2014, Scotland) are constantly in flux and it is a very astute business owner who, if questioned, would be able to be on the ball about everything ‘tax’.
So the following is a wee reminder to all employers out there who make loans to their employees. Listen up my friends this is important.
As a result of legislation in the 2014 Finance Bill, and with an effective date of 6 April 2014, employers are now able to offer tax free loans of up to £10,000 to their employees. This doubles the previous tax free amount of £5,000 which had been in place for twenty years.
The government has said that they expect this to affect 7,000 employers – are you one of them?
What if you have pre-existing loans to employees of over £5,000? Is it worth looking into having those loans paid off and a new loan entered into? Might be worth considering after taking advice from your tax adviser of course.
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