What is HMRC's official rate of interest? What does it apply to? What were the past rates?
This is a freeview 'At a glance' guide to HMRC's Official Rate of Interest (ORI).
HMRC's ORI is used to calculate the taxable value of:
- Employment-related loans.
- Some employer-provided Living accommodation.
The rate is set by Treasury Order and normally fixed in advance for a whole tax year, although it can be varied mid-year when there is a significant change in interest rates. HMRC's current policy states that the position is reviewed during a tax year if interest rates fall significantly, to ensure that employees are not overtaxed on benefits.
It was announced at the 2024 Autumn Budget that from 6 April 2025, the previous public commitment made by the Inland Revenue in January 2000 that the ORI will not increase in-year, will no longer be applicable.
- As of 6 April 2025, the ORI may increase, decrease, or be maintained throughout the year.
- The rate will be reviewed on a quarterly basis with any changes in the rate occurring following a quarterly review, where appropriate.
- If there are any in-year changes to the rate, these will take effect on 6 July, 6 October and 6 January.
The ORI increased to 2.25% from 6 April 2023 and is due to increase to 3.75% from 6 April 2025.
Actual and average rates:
| Year |
Rate % |
| 2025-26 | 3.75 |
| 2024-25 | 2.25 |
| 2023-24 | 2.25 |
| 2022-23 | 2.00 |
| 2021-22 | 2.00 |
| 2020-21 | 2.25 |
| 2017-18 to 2019-20 | 2.50 |
| 2015-16 to 2016-17 | 3.00 |
| 2014-15 | 3.25 |
| 2010-11 to 2013-14 | 4.00 |
| 2009-10 | 4.75 |
Useful guides on this topic
Loans: Employment-related
What is an employment-related loan? What are the tax and benefit-in-kind implications? Which loans are exempt? How is the value of any benefit calculated? What needs to be considered if the loan is made to a shareholder?
Accommodation benefit
When is accommodation a taxable benefit? What are the exemptions? How is the benefit calculated? Can accommodation be claimed as part of business travel?
Directors' loan accounts: Toolkit
HM Revenue & Customs (HMRC) have a director's loan accounts toolkit for advisers. This is our enhanced version with planning points.
Close company loans toolkit (loans to participators)
This guide takes a detailed look at the Corporation Tax treatment when a Close Company makes a loan to a participator (director-shareholder). It also provides links to our guides for individuals on the making of loans to companies.
Payrolling of benefits
The value of certain taxable benefits in kind can be included in taxable pay when calculating the PAYE deducted from payments of wages and salaries to employees.
External links
The Taxes (Interest Rate) (Amendment) Regulations 2023
Beneficial loan arrangements: HMRC official rates
Employment Income Manual: EIM26104 The benefits code: beneficial loans: amount of the official rate