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Hi mike, if the co. Provides loan to employees, however the employee only pay 2% interest while the market interest is 6%.
How do we deal with this. Im stuck and yet 3 days to 4 days till exam. Im stress
This seems more like an F6 or P6 taxation question!
So far as P2 is concerned, the examiner will tell you the effective rate of interest (presumably the employee will be required to repay the loan at a substantial premium)
If not, the difference should be shown as an expense and included within the wages and salaries expenses (and taxed by way of tax deducted at source as a benefit in kind)
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