Legislation, United Kingdom

UK | Official Rate of Interest increase effective 6 April 2025

UK | Official Rate of Interest Increase Effective 6 April 2025

The UK’s Official Rate of Interest (ORI) is changing. Effective April 6, 2025, the ORI will increase from 2.25% to 3.75%. This follows the Chancellor’s Autumn Budget on October 30, 2024, where quarterly reviews of the ORI were announced, replacing the previous annual review system.

Why the change? To prevent employees from being overtaxed during potential interest rate drops.

What’s the ORI used for? HMRC uses the ORI to calculate the taxable value of:

  • Employment-related beneficial loans
  • Some employer-provided living accommodation

Key details:

  • New Rate: 3.75% (up from 2.25%)
  • Effective Date: April 6, 2025
  • Legal Basis: Statutory Instrument 2025 No. 270, Taxes (Interest Rate) (Amendment) Regulations 2025

Need more info?

Stay on top of upcoming changing regulations. We simplify payroll compliance and save you time. Discover how automation can streamline your payroll processes.

Related Posts