Expenses and benefits: loans provided to employees
As an employer providing loans to your employees or their relatives, you have certain National Insurance and reporting obligations.
There are different rules for:
- providing ‘beneficial loans’, which are interest-free, or at a rate below HMRC’s official interest rate
- providing loans you write off
- charging a director’s personal bills to their loan account within the company
The rules cover beneficial loans advanced, arranged, facilitated, guaranteed or taken over from someone else by:
- you (the employer)
- a company or partnership you control
- a company or partnership that controls your business
- a person with a material interest in your business
See the technical guidance for what to do in more complicated situations, eg if you use third-party arrangements to make a loan to your employee.