First time self assessment calculation before submittnig?

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    First time self assessment calculation before submittnig?

    Hi all

    This might be a simple one, or not.

    Can someone please advise if this seems correct?

    For 2019-2020 I have the following on the HMRC form:

    £9715 income
    £2558 total allowable expenses

    Profit £7517

    I believe mortgage payments/interest are not counted now? unless I should have included that in taxable expenses? but didn't read it anywhere :/

    The next page worked out £1425.20 due for 2019-2020 based on my figures, then it seems you have to pay half of the next year.


    I did this calculation as a check on the Tax Scouts rental income calculator and it mentioned I can claim £510 from mortgage interest payments and £306 as a tax credit?

    This is my first time doing this, any help much appreciated.

    Cheers

    #2
    Are you using the online self assessment or a paper tax return?
    Have you had a statement of interest from your mortgage company telling you how much interest you have paid on your mortgage for the 2019 - 2020 tax year and have you included that amount in the £2,558 expenses figure?

    Comment


      #3
      Thanks BTL

      I am using the online version as it advised me to.

      No actually, is this something I request from them or do I use the annual statement they send? The £2558 does not include my mortgage payments

      Comment


        #4
        You need to phone your mortgage lender and ask them to send you a statement of interest for the 2019 - 2020 tax year (I’m assuming you’ve got a buy to let mortgage rather than just renting the property out with a residential mortgage) some lenders send them without you having to ask but if you haven’t received it yet they probably won’t send it until you ask.
        For the 2019 - 2020 tax year 25% of your interest (and any associated costs such as broker fees) is deductible as an expense, the other 75% you will receive a 20% tax credit on in the form of a reduction on the tax bill. From 2020 onwards none of it is deductible as an expense instead you will receive a 20% credit on the total allowable mortgage costs. There is separate boxes in the online assessment for the mortgage costs, I’ll have a look back through mine tomorrow to refresh my memory of how it’s done as I had a bit of confusion with mine this year.

        Comment


          #5
          As for paying half of next years bill yes you have to pay that but I think you have until 31st January 2021 to pay that.

          Comment


            #6
            Thank you BTL, I really appreciate this as did not know.

            Yes I have a buy to let mortgage so should be fine to obtain this.

            Aha, so the £510 tax scouts refer to is the 25% of the interest.

            Oh right, I didn't notice the mortgage cost ones but maybe overlooked it.

            Many thanks indeed, most helpful



            Comment


              #7
              For tax scouts calculator to know that £510 is 25% of your mortgage interest you must’ve already received a statement of interest stating that your interest for the 19 - 20 tax year was £2,040
              75% of £2,040 is £1,530 and a 20% credit on that would be £306 so that’s where the £306 came from in your original post. This means you must already have the statement of interest so don’t need to request one.
              The figures of £510 and £1,530 are what is needed for the tax return but they are entered separately from your expenses such as gas safety certificate and any maintenance expenses etc.

              Comment


                #8
                Taking your mortgage costs in to account I think your tax bill should end up somewhere around £1,020 assuming all the figures you’ve supplied are correct.

                Comment


                  #9
                  On tax scouts I entered my monthly interest only payment on their calculator which I guess is the same thing and makes sense now.

                  Yes I did, and do, find it a little confusing where to enter what, despite reading lots and watching their videos! If you could advise or point me in the right direction it would be great?

                  I ticked the option to submit expense in one go rather that detailed, assume that it ok? also surprised it seems to be done on trust, luckily I do keep all receipts


                  Comment


                    #10
                    Also just remembered I changed the deal with the provider and paid 1 £1495.00 fee which must have to go somewhere too?

                    many thanks!

                    Comment


                      #11
                      You need to know how much total interest you’ve paid during the entire 19 - 20 tax year, add that together with the £1,495 and then work out what 25% and 75% of that figure is to enter in the appropriate boxes on the tax return , you don’t just enter your monthly payment.

                      Comment


                        #12
                        Ok, I seem to be fine with my numbers. Total amount of monthly interest only mortgage repayments and the fee to change offers is £3556.50 which 25% of that is £889.13 and 75% of is £2667.38 as far as my calculations go...

                        I just cannot find where I enter these figures, even having gone over the form several times now!

                        Just to be sure I haven't ticked something wrong, on the summary it shows:
                        Summary for Rental income

                        Business income: £ 9,715.00

                        Total allowable expenses: £ 2,558.00

                        Profit or Loss: £ 7,157.00

                        Capital allowances: £ 0.00

                        Balancing charges: £ 0.00

                        Tax adjustments: £ 0.00
                        Total taxable profits or net business loss (before any set-offs): £ 7,157.00Help about<b></b>: Total taxable profits or net business loss - opens in a new window

                        This is where I entered the rental income and thought the wording seemed odd:
                        Income for Rental income

                        I commit to provide honest and accurate information within this section.

                        Turnover - takings, fees, sales or money earned by your business: (optional)Help about: Your Turnover

                        Any other business income not already included above: (optional)Help about: Any other Business Income

                        Trading Income Allowance: (optional)Help about: Trading income allowance

                        Total business income: £9715.00

                        Hope that all makes sense and really do appreciate the time helping me on this.

                        Comment


                          #13
                          I dont think my previous post was approved as I edited it a few times and copied some text from my assessment form, maybe not allowed?

                          Comment


                            #14
                            It was saying my figures are fine now but I just cannot find where I enter these figures, even having gone over the form several times now

                            Comment


                              #15
                              It was saying? What’s ‘it’? Tax scouts calculator or Online assessment form?

                              Comment

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