Andrew McQueen
HMRC has announced that the official interest rate will remain at 2.25% for 2024/25, despite the Bank of England Base Rate currently standing at 5.25%. This official rate is used to calculate the income tax charge on the benefit of employment-related loans and the taxable benefit of some employment-related living accommodations. Previously, these rates fluctuated with the base rate and changed several times a year. However, in recent years, HMRC has fixed the rate for the entire tax year, simplifying the calculation of the taxable benefit.
For employers including beneficial loans on form P11d for 2023/24, the official rate to be used is 2.25%. This charge applies when the loan amount exceeds £10,000.