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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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The benefits code: beneficial loans: exemption for commercial loans: meaning of members of the public at large

Section 176(10) ITEPA 2003In the context of the exemption under Section 176(1) (see

EIM26158 and EIM26170), the public at large means the public in general as distinct from a particular section of the public. The essential difference is between ordinary customers with whom the lender deals on an arm’s length basis and other borrowers with whom he or she has a special relationship, for example employees, former employees or suppliers.

This does not mean that loans made by specialised lenders such as merchant banks that do not lend to the general public are automatically excluded from exemption. The criterion is not whether a substantial proportion of the comparable loans was made to all and sundry but whether such a proportion of those loans was made to ordinary customers with whom the lender was dealing at arm’s length.