Some generous employers will agree to loan their employees money at a low-interest or interest-free rate. If they're worth more than £10,000 the employee will pay tax on the difference between the interest rate you pay to your employer and the official rate of interest set by the Bank of England.
Beneficial loans to employees, which are interest free, or at a rate below HMRC's official interest rate.
Providing loans you write off as a business.
Charging a director's personal bills to their loan account within the company.
What's not included
If the loan has a combined outstanding value to an employee of less than £10,000 through the whole tax year.
If the interest is paid by the employee at a similar rate to that of the Bank of England interest rate you don't need to worry about reporting it as a BIK.
How is it taxed?
If the loan is not exempt you can work out the value and what tax is due at this HMRC link here.
Beneficial loans need to be reported on a P11D and you will have to pay Class 1A National Insurance on the value of the benefit via payroll.