Expenses and benefits: loans provided to employees

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As an employer providing loans to your employees or their relatives, you have certain National Insurance and reporting obligations.

What’s included

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

Beneficial loans

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.