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
-
CT61
-
How to apportion advisory mileage rates for EVs
In September, HMRC introduced a new two-tier advisory mileage rate for employees charging electric vehicles. The rate differs depending on whether the vehicle is charged at home or not. But what’s the correct approach if an employee does both?
-
Can flipping properties create unwelcome tax bill?
You’re planning to purchase a cheap property, refurbish it and eventually sell it on for a hefty profit. You’ve been told that as long as you live in the property, the gain is tax free, is this correct?