Cheap bank loans escape ‘perks’ net

Cheap bank loans escape ‘perks’ net

However, workers provided with accommodation as part of their wages could be taxed up to 20 per cent extra, based on their annual earnings.The benefits in kind measure was approved in last year’s Budget and will come into force from the 2004 year of assessment.

It aims to tax ‘significant items’, rather than minor benefits, that are provided by the employer free of charge or at a lower cost.The Comptroller of Income Tax, Malcolm Campbell, said that tax on cheap or interest-free loans would be too complicated to administer.

Contrary to popular opinion, he said, banking employees were rarely granted these kind of perks any more.

‘Cheaper loans were introduced when interest rates were high, at around 10-12 per cent, but with rates now at a 50-year low, they are virtually non-existent, if offered at all.’Mr Campbell stressed, however, that if staff were paid subsidies to cover the interest on their loans, this would be taxable under the new scheme.

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