Employee loans – it hasn’t all gone down the tubes!

20 March 2013

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Graham Farquhar, Employment Tax Partner at EY comments on season ticket loans:

“Going on the tube will continue to be tax free. Employers can now provide interest free non taxable loans up to the value of £10,000 to employees commuting to work.

“But it doesn’t just apply to season ticket loans, although this is the most common use. It will apply to all loans made to employees by their employer that are below the threshold. This could be used to buy a car or even as a contribution for a deposit for a house! 

“Care needs to be taken. If there is more than one loan to an employee, employers would need to ensure it does not exceed the £10,000 limit, otherwise there will be a tax charge.”