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    • Jamie91Mc
    • By Jamie91Mc 4th Mar 18, 10:07 PM
    • 1Posts
    • 1Thanks
    Staff mortgage & BIK tax implications... HELP
    • #1
    • 4th Mar 18, 10:07 PM
    Staff mortgage & BIK tax implications... HELP 4th Mar 18 at 10:07 PM

    I work for a high street bank and currently have a £75K mortgage in my sole name on a staff rate following the BOE baste rate, currently 0.5%.

    At the minute its all very simple and makes perfect sense for me to be on the staff rate.

    However, I'm looking to move and have put an offer on a house this weekend which has spurred me into checking my figures to make sure they're concrete. I have a mortgage in principal from my current provider/employer...

    But I've done a bit of reading and am now unsure how beneficial a staff mortgage would be in my new situation; I would have a part staff, part public rate mortgage

    Property value; £220,000
    Staff mortgage: £100,000 @ 0.5%
    Public rate: £89,000 @ (say) 2.5%
    40 year term

    I have questions around how much BIk tax I would pay on this (i'm a basic rate tax payer) and whether it would actually be better to go for a full public rate mortgage. Does anybody here have any idea how much BIK tax i would be liable for? or how to calculate it/

    Also the new mortgage would be in joint names with my partner who does not work for the bank, would she also have a BIk liability?

    i;m a bit lost to say the least!

Page 1
    • Thrugelmir
    • By Thrugelmir 4th Mar 18, 11:17 PM
    • 57,891 Posts
    • 51,262 Thanks
    • #2
    • 4th Mar 18, 11:17 PM
    • #2
    • 4th Mar 18, 11:17 PM
    The official rate used for calculating BIK is currently 2.5%.

    BIK is calculated on the difference between the OR and the Staff Rate (SR).

    To keep matters simple and purely as an example.

    The BIK would be 2.5% - 0.5% =2%

    £100k @2% = £2,000. At the basic rate of tax 20% = £400 additional tax to pay.

    As you would have a repayment mortgage then the actual tax charge would be lower.

    If you borrowed over a shorter term than 40 years. Then this would reduce your tax bill a little as well.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • Edi81
    • By Edi81 5th Mar 18, 6:43 AM
    • 413 Posts
    • 279 Thanks
    • #3
    • 5th Mar 18, 6:43 AM
    • #3
    • 5th Mar 18, 6:43 AM
    If it!!!8217;s the high street bank I!!!8217;m thinking if there should be a BIK calculator on the internal internet.
    The mortgage advisors can!!!8217;t give you details on the tax impacts.
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