Beneficial loan arrangements – official rates

New rate announced from 6 April 2014 it is 3.25%

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 Table of average official rates

Year Average official rate %
1995-96 7.79
1996-97 6.93
1997-98 7.08
1998-99 7.16
1999-00 6.25
2000-01 6.25
2001-02 5.94
2002-03 5.00
2003-04 5.00
2004-05 5.00
2005-06 5.00
2006-07 5.00
2007-08 6.25
2008-09 6.10
2009-10 4.75
2010-11 4.00
2011-12 4.00
2012-13 4.00
2013-14 4.00
2014-15 3.25

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2. Table of actual official rates

Use the table below in cases not within 1 above.

          Table of actual official rates           
From To % Rate
6 Nov 1994 5 Oct 1995 8.00
6 Oct 1995 5 Feb 1996 7.75
6 Feb 1996 5 Jun 1996 7.25
6 Jun 1996 5 Nov 1996 7.00
6 Nov 1996 5 Aug 1997 6.75
6 Aug 1997 5 Mar 1999 7.25
6 Mar 1999 5 Jan 2002 6.25
6 Jan 2002 5 Apr 2003 5.00
6 Apr 2003 5 Apr 2004 5.00
6 Apr 2004 5 Apr 2005 5.00
6 Apr 2005 5 Apr 2006 5.00
6 Apr 2006 5 Apr 2007 5.00
6 Apr 2007 5 Apr 2008 6.25
6 Apr 2008 28 Feb 2009 6.25
1 Mar 2009 5 Apr 2010 4.75
6 Apr 2010 5 Apr 2014 4.00
6 Apr 2014 3.25

Beneficial loans

Definitions or restrictions

The rules in this section cover interest-free loans or loans with an interest rate below HM Revenue & Customs (HMRC) official rate of interest that are provided to your employee – or their relative – by any of the following:

  • you
  • a company or partnership you control
  • a company or partnership that controls your business
  • a person with a material interest in your business

The rules can also apply if you or any of the others in the list above arrange, facilitate, or guarantee a loan, or take one over from someone else. However, there are also some different rules that can apply if you use third party arrangements to make a loan to your employee. For  more information, follow the link below.

EIM26110: The benefits code – beneficial loans: meaning of making a loan: loan made by third party; employee benefit trust

Note that there are other more complicated situations in which cheap or interest-free loans are covered by the rules.