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Glasgow
+44 (0)141 221 2984

Edinburgh
+44 (0)131 225 6366

Stirling
+44 (0)1786 451745

Dumbarton
+44 (0)1389 765238

Hamilton
+44 (0)1698 459444

French Duncan

Reduction in the official rate of interest from 6 APRIL 2014

18 March 2014

As a result of The Taxes (Interest Rate) (Amendment) Regulations 2014 coming into force, from 6 APRIL 2014 the costs of a cheap or interest free loan provided to an employee or director will be less due to the official rate of interest reducing from 4% to 3.25%. The lower interest rate means that the Benefit in Kind arising will be lower resulting in less tax for the individual and consequently a reduced Class 1A NIC liability for the company.

For those companies that do charge interest on loans at the official rate of interest the rate used from 6 April 2014 should be 3.25%.

If you have any questions on the above please contact our Tax Team on 0141 221 2984 or by email