Threshold for Director Loans Set to Increase to £10,000

The threshold for employment related taxable cheap loans to be treated as earnings of employment, will increase from the current threshold of £5,000 to £10,000 for 2014/15 and subsequent tax years. As long as the total outstanding balances on all such loans do not exceed the threshold at any time in a tax year, there is no tax charge.

This will be beneficial to many Limited Company Contractors who operate a director’s loan account to manage their affairs.