Even accountants make mistakes – mine did!

Even accountants make mistakes – mine did!

22:07 PM, 31st October 2017, About 7 years ago 26

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Today I had to undiscombobulate my accountants who were in utter confusion over Section 24. Not only had they applied it to my 2016-17 tax return but they had calculated it wrongly too. Fortunately I spotted this and was able to point out the error of their ways, to much embarrassment on their part.

It doesn’t surprise me. The rules are so complicated as to defy belief.

If this has happened to me it will doubtless happen to others and not everyone is so vigilant when it comes to checking detail. Nor is everyone is as understanding and there is a lot of scope for mistakes leading to loss of reputation, loss of business, legal action and more. I can envisage small accountancy firms coming very unstuck over issues like this, not to mention the extra workload for HMRC in having to try and check it all. Tax should not be so complicated that it requires this much effort to work it out.

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Comments

Puzzler

18:24 PM, 1st November 2017, About 7 years ago

Reply to the comment left by Asif Ahmed at 01/11/2017 - 15:48
I think it will be clear when the online form is uploaded for this year and onwards which numbers to put in. I expect it will do the calculation for you. That said, checking it is not a bad idea as they have been known to be wrong...

Mark Alexander - Founder of Property118

19:29 PM, 1st November 2017, About 7 years ago

Reply to the comment left by Asif Ahmed at 01/11/2017 - 17:27
Mathematicaly you are correct, but the restriction and the tax credit are technically two different things.

Vijay Khullar

8:27 AM, 2nd November 2017, About 7 years ago

For those who are having sleepless nights worrying. The percentage is 75% for 2017/18, 50% for 2018/19, and 25% for 2019/20.

Alison King

9:16 AM, 2nd November 2017, About 7 years ago

Reply to the comment left by Mark Alexander at 01/11/2017 - 19:29
Exactly. This is one of the things my accountant had misunderstood. They had simply applied 75% of my mortgage interest as an expense. I think applying 80% as a shortcut to capturing the rest if the interest at base rate as suggested would only work where the taxpayer is already in the 40% bracket before adding on the property income. I do hope HMRC do build a tool into the tax form. If accountants are confused what hope do people doing self assessments have?

Chris Novice Shark Bait

12:41 PM, 2nd November 2017, About 7 years ago

Good point Alison. We were thinking that one way to save as we downsize would be to submit our own tax returns. The prospect of that is daunting just now. If the government change their minds on this (wishful thinking) then happy days but more chaos will ensue.

Mehmood Mohammed

11:02 AM, 17th November 2017, About 7 years ago

Hello Everyone
An interesting scenario.
Client of mine owns a number mixed use properties i.e shops with flats above them.
He has a large loans on these properties.He is very professional and has attended a lot of seminars particularly S24. He is adamant that his presenters assertion that you can claim the whole of interest on the particular loan because of the fact that the property is mixed use and that S24 restriction does not apply. He is higher rate tax payer..
Any comments on this assertion will be most welcome.
Regards

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