Expenses and benefits: loans provided to employees

1. Overview

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.