Highlights from the broader tax news for the week ending 8 March 2023, including: the official rate of interest; payrolling benefits deadline; updated off-payroll working guidance; and changes to the VAT treatment of local authority leisure services.
Official rate of interest to increase from April 2023
The official rate of interest, which applies to beneficial loans and employer-provided accommodation, increases from 2.0% to 2.25% pa from 6 April 2023. Current and past rates are at Beneficial loan arrangements — HMRC official rates.
Deadline approaching for payrolling benefits
If employers want to payroll benefits in the 2023/24 tax year, they must register with HMRC on or before 5 April 2023. Read more from HMRC on payrolling benefits. HMRC also has a recorded webinar Taxing employees’ benefits and expenses through your payroll.
HMRC updates off-payroll working guidance
HMRC has updated its off-payroll working rules GOV.UK guidance. This includes a new overview page – understanding off-payroll working (IR35) – that links to the other more specific pages. Those pages also contain an increased number of cross references to the relevant sections of technical guidance in the Employment Status Manual.
Changes to VAT treatment of local authority leisure services
Further to Revenue & Customs Brief 3 (2023), local authorities can now revisit the VAT position of the supply of in-house leisure services. The brief has been published following a number of VAT tribunal cases on this subject.
Previously, local authorities providing in-house leisure services to members of the public could treat these supplies as business activities and either charge VAT at the standard rate or apply the VAT exemption.
HMRC now accepts that local authorities can treat the supply of in-house leisure services as a non-business activity. Some local authorities may be able to make a claim to HMRC for overpaid output tax.
Claims should be emailed to firstname.lastname@example.org with ‘2023 LA VAT non-business’ in the subject line.