What is taxed

Exactly the same undervalues as the current regime – see ERSM70020.

How is it taxed

An interest-free notional loan is deemed to be made by the employer to the employee and the following provisions in Chapter 7 of Part 3 (beneficial loans) apply to it -

ITEPA03/S175 (benefit of taxable cheap loan treated as earnings),

ITEPA03/S178 (exception for loans where interest qualifies for tax relief),

ITEPA03/S180 (threshold for benefit of loan to be treated as earnings),

ITEPA03/S182 (normal method of calculation: averaging),

ITEPA03/S183 (alternative method of calculation),

ITEPA03/S184 (interest treated as paid),

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