Tax Traps in Director Loans – A Quiet £10,000 Threshold You Cannot Afford to Ignore

Tax traps in director loans – A quiet £10,000 threshold you cannot afford to ignore

Director and employee loans are a standard feature in many small companies. They are used to bridge gaps, cover work expenses or support cash-strapped staff. However, once they creep past £10,000, they start attracting unwanted attention from HM Revenue & Customs (HMRC). The overlooked threshold Loans above £10,000, regardless of when or why they were made, can become taxable benefits. If those loans are interest-free or carry a rate lower than …

Do you need to report that loan? The £10,000 rule and P11D implications

Many businesses routinely offer financial support to their directors or employees in the form of loans. These may be intended as temporary assistance or advances to cover business expenses. However, when the value of a loan exceeds a certain threshold, the consequences for reporting and tax compliance become more complex. Hm Revenue & Customs (HMRC) has recently issued letters to companies whose financial statements show loans of over £10,000 to…