HMRC’s official rate of interest set to rise to 2.25%
HMRC’s official rate of interest will increase to 2.25% from 6 April 2023. What does it apply to?
HMRC’s official rate of interest (ORI) will increase from 2% to 2.25% on 6 April 2023. The ORI is used to calculate the taxable benefit in kind where an employee has a loan from their employer, or their employer provides them with living accommodation. There's no taxable benefit where the aggregate of all loans outstanding to an employee is less than £10,000 throughout the tax year. Above this amount, if a loan is provided to an employee interest free, or at a lower rate of interest than the ORI, the employee is taxed on the difference between the interest paid and the ORI. The situation can therefore be simplified by charging an employee the ORI on a loan.
Employer-provided living accommodation is less common, but the ORI is applied to the value of the property to determine the cash equivalent of the benefit.
Related Topics
-
Uber loses VAT margin scheme appeal
The Court of Appeal has ruled that Uber cannot use the Tour Operators Margin Scheme (TOMS) when accounting for VAT on its ride-hailing services. The decision could have significant implications for businesses that act as intermediaries when supplying services to consumers. What was the dispute about?
-
Investment bond - undercover tax trap?
Inheritance tax is a hot topic but most couples only need to be concerned if they are worth more than £1m. What you don’t hear about is the income tax charge on investment bonds that’s payable on death. Can you reduce the tax bill before it’s too late?
-
When are staff discounts tax efficient?
This website uses both its own and third-party cookies to analyze our services and navigation on our website in order to improve its contents (analytical purposes: measure visits and sources of web traffic). The legal basis is the consent of the user, except in the case of basic cookies, which are essential to navigate this website.