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Posted Wed, 01 Feb 2023 11:03:27 GMT by Richard Heibel
One of my friends has invested in my husband and I and provided us with a loan to buy a flat that we will pay inflation on. He also happens to be the Managing Director of the company that I work for. It's been suggested that I would need to pay tax on a monthly basis that I will be able to claim back once the loan is paid off in full? Is this correct? The loan has come from my friend personally and not through the business and I want to make sure I'm following all procedures correctly and it looks as though I could be losing around £300 per month from my wage if this is the case. Thanks very much! Rich
Posted Tue, 07 Feb 2023 13:44:14 GMT by HMRC Admin 32

If this a loan from employer to employee, then it could be considered a beneficial loan, especially if loan payments are deducted from your salary.  

Guidance can be found on this at

Beneficial loan arrangements (480: Chapter 17)

Peer to peer lending is an alternative investment providing opportunities for individuals to lend directly to other people or businesses without using a bank.  

Peer to peer lending

The interest received from peer to peer loans is taxable in the same way as any other interest received. Interest payments received from peer to peer loans may be paid either with or without deduction of tax. If someone receives interest without deduction of tax, they will need to notify HMRC of the income and to pay the correct amount of tax.

Thank you.

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