Recruitment incentive

Recruitment incentive

Didn't find your answer?

My company wants to recruit a key new employee. The company wishes to ensure that he stays with the company for at least 2 years. The proposal is to offer him an interest-free loan of £40000. This will be put in an escrow account, and the employee can get his hands on the money only after 2 years. At that point, a taxable bonus of £40000 will be paid to him, and the escrow account will be closed. Are there any tax or company law problems?
ghd

Replies (1)

Please login or register to join the discussion.

avatar
By User deleted
01st Feb 2008 13:04

Can't see where the loan bit comes in then?
Otherwise, there is no problem offering an employee a loan (providing he is not a relative of the directors, or connected in any way that could lead to a breach of fiduciary duties. Check that the mem and arts don't forbit it. There will be a BIK charge on the difference between the official rate of interest and 0%.

Thanks (0)