BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?
No donation is too small. If every visitor before 31 December gives just £5, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!
 |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] | |
United Kingdom Statutory Instruments |
||
|
You are here: BAILII >> Databases >> United Kingdom Statutory Instruments >> The Taxes (Interest Rate) (Amendment) Regulations 2021 No. 249 URL: http://www.bailii.org/uk/legis/num_reg/2021/uksi_2021249_en_1.html |
||
[New search] [Help]
This is the original version (as it was originally made). This item of legislation is currently only available in its original format.
Statutory Instruments
Income Tax
Made
4th March 2021
Laid before the House of Commons
9th March 2021
Coming into force
6th April 2021
The Treasury make the following Regulations in exercise of the powers conferred by section 178(1) and (2)(s) of the Finance Act 1989( 1).
1. These Regulations may be cited as the Taxes (Interest Rate) (Amendment) Regulations 2021 and come into force on 6th April 2021.
2. In regulation 5(1) of the Taxes (Interest Rate) Regulations 1989( 2), for “on and after 6th April 2020, be 2.25 per cent per annum” substitute “on and after 6th April 2021, be 2.00 per cent per annum”.
David Rutley
Maggie Throup
Two of the Lords Commissioners of Her Majesty’s Treasury
4th March 2021
(This note is not part of the Regulations)
These Regulations amend the Taxes (Interest Rate) Regulations 1989 ( S.I. 1989/1297) (“the 1989 Regulations”).
The 1989 Regulations set the official rate of interest for the purposes of Chapter 7 of Part 3 of the Income Tax (Earnings and Pensions) Act 2003 (c. 1)(“ITEPA”). Chapter 7 provides that tax is chargeable on an employment-related loan to the extent that the interest rate that it carries is lower than the official rate of interest. Calculation of the cash equivalent of the benefit of the loan for any tax year, which is generally the amount of the benefit that will be treated as earnings from the employment, is the difference between the amount of interest on the loan at the official rate and the amount of interest paid on the loan for that year. Section 181 of ITEPA in effect defines “the official rate of interest” as the rate prescribed in regulation 5 of the 1989 Regulations.
Regulation 2 reduces the generally applicable official rate of interest from 2.25 per cent to 2.00 per cent per annum with effect from 6th April 2021. It does not affect the modified official rates that apply in relation to Japan and Switzerland, which are prescribed in regulation 5(2) of the 1989 Regulations.
A Tax Information and Impact Note has not been prepared for this instrument as it contains no substantive changes to tax policy.
1989 c. 26; paragraph (s) of section 178(2) was inserted by paragraphs 156 and 162(d) of Schedule 6 to the Income Tax (Earnings and Pensions) Act 2003 (c. 1).
S.I. 1989/1297; relevant amending instruments are S.I. 1994/1307, 2009/199and 2020/194.
