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  3. How is my P11d benefit in kind calculated for directors loan?
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  3. How is my P11d benefit in kind calculated for directors loan?

How is my P11d benefit in kind calculated for directors loan?

These are loans made by the company to directors and their families. If the loans are more than £10,000 then a benefit in kind arises at the beneficial loan rate of 2.5% for 2019/20. If the loans are less than £10,000, then no benefit is applied.


This is based on the average of the loan in the year, it is calculated as follows:

  • Loan balance at the start of the year 6th April 2019 or (value when loan taken out in year) + loan at end of the year 5th April 2020 (or at point of repayment).
  • Then divide by two as we are working out the average cost of the loan which is multiplied by 2.5%. This figure will be reported on your P11d form.

Calculation example

A director borrows £50,000 from his company on 6th April 2019. He repaid £20,000  of the loan during the year and at 5th April 2020, there was £30,000 remaining.

Calculate the average loan during the year £50,000 + £30,000 / 2 = £40,000 x2.5% ( beneficial loan rate). Therefore there is a £1000 benefit reported on the P11d form.

Updated on 15th May 2020

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