My girlfriend has managed to find a colleague who is on this very mortgage deal and it seems that he /does/ pay tax on the benefit.
I'm still yet to get any details on how it's calculated or how it is paid.
You're taxed on the difference between what you actually pay and what you would have paid as a normal punter.
"Mark" wrote
NOT CORRECT! See my other posts in this thread. You are actually taxed on the difference between what you actually pay and HMRC's current "official rate", which is currently 6.25% -- "what you would have paid as a normal punter" is irrelevant to the calculation.
My wife was taxed in exactly the way I described. Maybe things have changed recently?
Or maybe the punter rate happened to match the official rate?
After speaking to HM R&C, the lender and my girlfriend speaking to someone at work I can confirm this IS the case!
However, my problem is now how & when that is calculated. I think it should be done every month since the base rate, the SVR, and the HM R&C official rate are subject to monthly variations. However, HM R&C say that the value they use to calculate the tax is based on a single value for the year that my girlfriend's employer submits on a P11D form.
Then I'm not sure if we'll get notification of how much she is actually paying - sinc all the tax is paid PAYE by my girlfriend I'll need to know how much to reimburse her by since it is a shared mortgage!
A standard mortgage is starting o seem a lot simpler!
It's possible.
"elziko" wrote
Why the exclamation - did you doubt me?!
"elziko" wrote
I seem to remember them adjusting my tax code when I had one in the nineties. [It seemed a bit awkward back then, with (about 3) elements being added & taken away -- but part of the complexity was due to MIRAS.]
"elziko" wrote
I don't think that's right. This page:
"elziko" wrote
Sounds about right.
"elziko" wrote
Employers usually calculate this by the averaging method. They take the starting balance, the closing balance and calculate the Official interest on the average loan through the year. They then deduct the interest actually paid by the employee and report the balance on the P11D return. If the amount of the loan has varied throughout the year, HMRC can elect to use the exact method which looks at each transaction throughout the year but they would only normally use this to counter what is known as bed and breakfasting.
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