Personal Tax - Beneficial Loan Question , Please help?

Pjdav

Hi, i would be so grateful if someone could help me with the following question:
An Employer offered interest free loans to each of his employees as follows, Jules received the following interest free loans. She has not repaid any of these loans -

1 Jan 13 - 4,000
1 Jan 16 - 5,000
1 Jan 17 - 3,000

It ask me to use the average method to work out the assessable benefit in kind - 16/17.

The answer i come to is 180 (4,000+5,000+3,000/2) x3% - official rate interest) - this is wrong.

Any help will be appreciated. Thank you

fournaanjez

Average method means taking the balance at the beginning of the tax year, adding this to the balance at the end of the tax year, dividing this by 2 and multiplying it by the ORI.

So balance at 6/4/16 = 4,000 (1/1/13) + 5,000 (1/1/16) = 9,000

Balance at 5/4/17 = 9,000 + 3,000 (1/1/17) = 12,000

9,000 + 12,000 = 21,000/2 = 10,500

10,500 x 3% = 315