HMRC’s official rate of interest set to rise to 2.25%
HMRC’s official rate of interest will increase to 2.25% from 6 April 2023. What does it apply to?
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Accounting for VAT if there is no cash payment
Your business has submitted repayment returns for the last two quarters and you are concerned that you might have underpaid output tax on some supplies where no money has changed hands. Are your concerns justified?
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Treatment of distributions under review
The government has launched a consultation on modernising the tax treatment of distributions and repayments of capital by companies. The proposals could affect the distinction between dividends taxed as income and capital payments subject to CGT. What changes are being considered?
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Tax relief on equipment you haven’t paid for (yet)
The timing of tax relief for purchases of equipment isn’t straightforward when payments are delayed or goods are purchased through hire purchase (HP) agreements. How can you use these rules to your advantage and get tax relief before you’ve paid the final invoice?
HMRC’s official rate of interest (ORI) will increase from 2% to 2.25% on 6 April 2023. The ORI is used to calculate the taxable benefit in kind where an employee has a loan from their employer, or their employer provides them with living accommodation. There's no taxable benefit where the aggregate of all loans outstanding to an employee is less than £10,000 throughout the tax year. Above this amount, if a loan is provided to an employee interest free, or at a lower rate of interest than the ORI, the employee is taxed on the difference between the interest paid and the ORI. The situation can therefore be simplified by charging an employee the ORI on a loan.
Employer-provided living accommodation is less common, but the ORI is applied to the value of the property to determine the cash equivalent of the benefit.
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