8.3 On 1 June 2016, Stephen was provided by his employer with an interest-free loan of

£20,000. He repaid £5,000 of this loan on 1 January 2017 and then repaid £3,000 on 1 March 2017. Compute the taxable benefit in 2016-17 using:

(a) the normal method

(b) the alternative method.

Assume that the official rate of interest is 3% per annum. Perfonn all calculations to the nearest month and to the nearest pound.