By Ian Holloway, head of legislation and compliance at Cintra HR & Payroll Services
HMRC’s official rate of interest is used in two situations:
1. To ascertain the point at which a low (or no) interest loan becomes beneficial and, therefore, needs to be considered for reporting on the P11D;
2. To calculate the reportable value of living accommodation over £75,000.
Payroll and P11D software will need this figure. Since 6 April 2015, this has been set at 3%. From 6 April 2017, it reduces to 2.5% courtesy of the Taxes (Interest Rate) (Amendment) Regulations 2017.
Any Budget or Autumn Statement is followed by a raft of policy announcements and documentation. Normally, I would say that I am quite good at digesting all of this information and picking out the parts that are relevant to the UK payroll and pensions professions. However, I missed the fact that these regulations were laid on 8 March 2017.
To be honest, I still cannot see the announcement from HMRC about the change to this very important figure. It is certainly not reflected in their Gov.uk guidance (as at the time of writing anyway). Maybe they missed it as well!
Note that there are no changes to the modified official rates that apply in relation to Japan (3.9%) and Switzerland (5.5%).
Posted on 15th March 2017 by Jerome Smail
blog comments powered by Disqus