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H. Low interest loans

Low interest loan expenses1:33
Low interest loan expenses
1 videos, with a playing time of 1 minute


 

Low interest loan expenses1:36

"If a company provides low interest loans, how's it recorded?"

When the company provides low interest loans, including zero interest loans, to an employee, the expense is considered a: "Benefit-in-kind"

HMRC has two systems for submitting expenses:

  • The old "P11D" system, that's being phased out.
  • And the new "payrolling" system, that's replacing it.

Unfortunately, HMRC hasn't included "H. Low interest loans" expenses in their new "payrolling" system.

Which means that if you've got "H. Low interest loans" expenses to submit, HMRC requires ALL employers to submit it using the old "P11D" system (submitted per year, per employee).

To learn more:

  • About how to submit a P11D, go to GOV.UK.

By "ALL employers" it means, regardless of whether you've moved to the new "payrolling" system, or if you're still on the old "P11D" system. All employers who've got any "H. Low interest loans" expenses must submit them through the old "P11D" system. It's the only way HMRC is willing to receive them.

Because it's the only way HMRC's willing to receive them, if you've got "H. Low interest loans" expenses, you'll need to talk to your accountant on how to submit them through the old "P11D" system.

And that's it! That's everything you need to know about providing low interest loans to an employee!

Updated: Sun, Nov 5, 2023.

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www.1st.money/help/Expenses/H._Low_interest_loans/