No income tax on director and employee loans up to £10,000

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The current £5,000 limit for cheap or interest free loans to directors and employees increases to £10,000 from 6 April 2014. This means that such loans will not need to be reported on P11D forms and there will be no income tax or national insurance liability on loans up to the new limit. However, there may be a 25% corporation tax charge payable by the company if the loan is to a shareholder and is still outstanding 9 months after the end of the accounting period.

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