eznfrank
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| posted on 17/6/09 at 08:13 PM |
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Way OT: Can someone just run over some simple BIK tax calculations??
I have a mortage through my employer and I pay BIK tax on the difference between the official interest rate and the rate I get as staff.
HMRC have today told me that this benefit equates to £6243 per annum!!!
However, my mortgage is in two parts and only £22,590 is at less than the official rate. I calculate the interest on the official rate of 4.75% to be
£1073 and the interest on my rate of 4.69% to be £1059, a difference of a mere £14 per annum. Which would mean that the BIK should be based on £14
NOT £6243!!!!!
Does this make sense to anyone??
Thanks for any help 
[Edited on 17/6/09 by eznfrank]
[Edited on 17/6/09 by eznfrank]
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blakep82
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| posted on 17/6/09 at 08:53 PM |
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i think i remember who you work for... without namimg names 
have a read of this
http://forums.moneysavingexpert.com/showthread.html?t=826717
i have to say i could NEVER get my head around benefit in kind, and it wasn't part of my job, we had to refer people to either (i can't
rememebr, it was a while ago now lol) HR or the tax office. i think it was HR we had to refer people to, however, i'd go straight to the tax
office though. you may know my reasons for saying that 
but i don't think its as straight forward as the difference between the interest you pay, isn't it something to do with your salary
too?
i'm only posting that because its been nearly 45 minutes and no one can offer any more useful help (ie actually give you the full
answer/calculations etc)
[Edited on 17/6/09 by blakep82]
________________________
IVA manual link http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1081997083
don't write OT on a new thread title, you're creating the topic, everything you write is very much ON topic!
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eznfrank
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| posted on 17/6/09 at 08:58 PM |
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Yes you're right with my employer. I just found an online calculator and it works it out the same as I did.
HMRC's own literature states: "You have to pay tax on the benefit of paying no interest or interest at less than the official interest
rate, on your loan from your current or previous employer. £6243 is the difference between the interest you pay and what you would pay if interest
was charged at the official rate"
It's the £6243 which is wrong, the difference between the two as per their guidelines would actually be the £14!!
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