Andrew McQueen
HMRC has announced that the official rate of interest will increase from 2% to 2.25% on 6 April 2023. The official rate of interest is used to calculate the income tax charge on the benefit of employment-related loans and the taxable benefit of some employment-related living accommodation. These rates used to fluctuate in line with the base rate, but in recent years HMRC has fixed the rate for the whole tax year.
For those employers including beneficial loans on form P11d for 2022/23 the average official rate to be used is 2%. The charge applies where the amount of the loan exceeds £10,000.