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