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Income Tax (Earnings and Pensions) Act 2003

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Changes over time for: Section 183

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Point in time view as at 17/07/2013.

Changes to legislation:

Income Tax (Earnings and Pensions) Act 2003, Section 183 is up to date with all changes known to be in force on or before 06 March 2025. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations. Help about Changes to Legislation

183Alternative method of calculationU.K.
This section has no associated Explanatory Notes

(1)The alternative method of calculating for the purposes of this Chapter the amount of interest that would be payable on a loan for a tax year at the official rate applies for a tax year—

(a)if [F1an officer of Revenue and Customs] so [F2requires] , by notice to the employee, or

(b)if the employee so elects, by notice to [F1an officer of Revenue and Customs] .

(2)Notice may be given on or before the first anniversary of the normal self-assessment filing date for the tax year in relation to which the question arises whether the loan is a taxable cheap loan.

(3)The alternative method is as follows—

Step 1

Find for each day in the tax year in question the maximum amount of the loan outstanding on that day and multiply it by the official rate of interest in force on that day.

Step 2

Add together each of the amounts obtained under step 1.

Step 3

Divide the result by the number of days in the tax year.

(4)Where in any tax year the cash equivalent of the benefit of the same taxable cheap loan is to be treated as earnings of two or more employees then, for the purposes of determining the cash equivalent of the benefit of the loan, the alternative method applies if—

(a)the notice under subsection (1)(a) is given to all those employees, or

(b)the notice under subsection (1)(b) is given by all those employees.

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