Tax Return ye2018 checking Finance costs?

Tax Return ye2018 checking Finance costs?

9:22 AM, 20th December 2018, About 4 years ago 17

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I’m very confused with Section 24 Tenant tax. Please can someone clarify the simple profit calculation for a Buy To Let for YE2018

Rents received £30,000

Repairs & renewals £10,000

Mortgage Interest £10,000

So to the Layman the Profit is therefore £10,000 meaning tax at 20% i.e. £2,000 is due.

But what should the calculation be due to the tax changes.

Many thanks

StevieG



Comments

Roger P

13:52 PM, 24th December 2018, About 4 years ago

Having just started mine you need to find the box marked
"Residential finance costs not included in 'Loan interest and other financial costs': (Optional) "
and fill in the 25% interest you have lost
When you do a "view your calculation" the 20% of the 25% appears below the blue "Income Tax due" heading as
"minus Relief for finance costs"
hope this helps

Sjp

5:57 AM, 26th December 2018, About 4 years ago

Sorry to digress but I, like the OP assumed that my tax for 2017/18 should be paid by 31/1/19.

However my new accountant has told me that I should have “paid on account” January and June 2018 already.

Does this mean I haven’t paid my taxes and thus liable to a fine?

Does this also mean that I’m due to pay a 18/19 payment 31/1/19 as well as the above?

I’m finding this really confusing. I thought that you just paid the previous taxes at the end of the following year??

AA

9:33 AM, 26th December 2018, About 4 years ago

Reply to the comment left by Sjp at 26/12/2018 - 05:57
Your accountant is correct and you will be fined. Unless this is the first return you have ever done.

Seething Landlord

9:37 AM, 26th December 2018, About 4 years ago

Reply to the comment left by Sjp at 26/12/2018 - 05:57
My understanding is that if payments on account were due they would have been shown in the tax calculation produced when your tax return for 2016/2017 was filed and would only be levied if the amount which you owed following that assessment was greater than £1,000.

Sjp

22:18 PM, 27th December 2018, About 4 years ago

Reply to the comment left by AA at 26/12/2018 - 09:33
AA I’m furious then. My husband died 2 years ago and the old accountant has been sorting back tax out under the Let property campaign and didn’t tell me this. What will I be fined?

Seething Landlord

10:29 AM, 28th December 2018, About 4 years ago

Reply to the comment left by Sjp at 27/12/2018 - 22:18
It sounds as though your tax affairs are somewhat complicated and without a full knowledge of everything that has been going on between your old accountant and HMRC plus a proper understanding of your current situation nobody is going to be able to tell you what level of penalty, if any, you might expect.
The answer to your original question based on my own experience and not to be taken as professional advice, is that by the 31st of January 2019 you have to pay any tax still owing for the 2017 to 2018 tax year plus 50% of the estimated tax for the 2018 to 2019 tax year, unless the estimated amount is less than £1,000, in which case no payments on account will be due. The second half of the estimated amount then has to be paid by 31st of July 2019 and any adjustments will be made when your tax return for 2018 to 2019 is filed. For specific advice on your own situation you need to consult your professional advisors.

Michael Barnes

21:40 PM, 31st December 2018, About 4 years ago

Reply to the comment left by Sjp at 26/12/2018 - 05:57That depends on whether or not you have previously elected to collect tax from lettings via PAYE on other earnings or pension income.

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