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The Taxes (Interest Rate) (Amendment) Regulations 2009

S.I. 2009/199 · Made 4 February 2009

Original text. legislation.gov.uk does not revise statutory instruments, so later amendments are not shown here. Changes made to it are listed under each provision when known.

Income Tax

Made 4th February 2009

Laid before the House of Commons 5th February 2009

Coming into force 1st March 2009

The Treasury make the following Regulations in exercise of the powers in section 178(1) and (2)(s) of the Finance Act 1989f1 and section 181(2) of the Income Tax (Earnings and Pensions) Act 2003f2:

Annotations to the whole text

Footnotes

f1

1989 c. 26. Paragraph (s) of subsection (2) of section 178 was inserted by paragraph 162(d) of Schedule 6 to the Income Tax (Earnings and Pensions) Act 2003.

f2

2003 c. 1.

Contents

  1. 1Citation and commencement
  2. 2Amendment of the Taxes (Interest Rate) Regulations 1989
  3. Signature
  4. Explanatory note

1Citation and commencement

These Regulations may be cited as the Taxes (Interest Rate) (Amendment) Regulations 2009 and shall come into force on 1st March 2009.

2Amendment of the Taxes (Interest Rate) Regulations 1989

(1)

Regulation 5 of the Taxes (Interest Rate) Regulations 1989f1 is amended as follows.

(2)

For paragraph (1) substitute—

“(1)

Subject to paragraph (2), the rate applicable under section 178 for the purposes of Chapter 7 of Part 3 of the Income Tax (Earnings and Pensions) Act 2003 (“Chapter 7”) shall, on and after 1st March 2009, be 4.75 per cent per annum.”.

(3)

In paragraph (2) for “section 181” substitute “Chapter 7”.

Signature

Tony Cunningham

Frank Roy

Two of the Lords Commissioners of Her Majesty’s Treasury

4th February 2009

Explanatory note

(This note is not part of the Regulations)

These Regulations amend regulation 5 of the Taxes (Interest Rate) Regulations 1989.

That regulation sets the applicable rate for the purposes of Chapter 7 of Part 3 of the Income Tax (Earnings and Pensions) Act 2003 (“ITEPA 2003”). Chapter 7 sets out the circumstances in which employment related loans give rise to a taxable benefit on the amount by which the interest actually paid is less than the amount that would have been due if calculated at “the official rate of interest”. Section 181 of ITEPA 2003 defines the official rate of interest as, in effect, the rate specified in regulation 5.

The principal amendment made by these Regulations specifies, with effect from 1st March 2009, a new generally applicable rate of interest of 4.75 per cent per annum, in substitution for the rate of 6.25 per cent per annum. The rates of interest specified in relation to Japan and Switzerland in paragraph (2) of regulation 5 remain the same. There is a minor amendment to replace references to section 181 with Chapter 7 so as to confirm that the official rate is set for the purposes of the Chapter as a whole (as provided for by section 181(1)).

A full and final Impact Assessment has not been produced for this instrument as a negligible impact on the private or voluntary sectors is foreseen.