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Old 06-07-2011, 08:15 AM
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Dragonlady Dragonlady is offline
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I understand what you are saying, but I think it is not governed by the CCA. I am not sure what the legislation is and I hope someone with more knowledge can help. it will be interesting to see what the DPASAR reveals for you.

I agree it is a contract between ttwo parties, so maybe it comes under some form of contract law......I am thinking aloud here. I am thinking along the lines of what is called a subsidised loan given to students by colleges, it does not earn interest. If your loan has interest it is a an unsubsidised loan, but still comes under different contract, not the CCA

This is what I have found out

The company pays into the trust and the employee is lent the money via the trust. No tax is payable on the loan itself. The repayments are deducted from your pre-tax salary, thus reducing your tax/NI liability. However, loans of >5k/year are taxed on the "interest" you would normally be paying, i.e. 40% of a "standard rate". So it can work out very tax advantageous. However, the value of the product you actually buy with the loan may be taxed as a benefit in kind, depending on what it is. Whether this applies to season tickets, I am not sure. Sorry I can't help further.

It's great for the employer though - no NI, tax relief on their contributions to the trust, and it's "green".

Student loans are not governed by the CCA, so I am thinking Employer Loans fall into this category. Reading a bit more and these loans are classified as a Personal Loan and they are not governed by the CCA, because there are tax breaks for the employer in giving them. It does fall under HMRC Legislation

Last edited by Dragonlady : 06-07-2011 at 08:43 AM.
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