Tax Return help - Rental Income

qwertyqwerty

Hi I am struggling to work out why my tax bill for the year has come out higher than expected.

My bill due for this year is £1286

I have rental income of £550 per month. Of which £445 per month goes to pay the interest only mortgage. I also have expenses totaling around £1000 for boiler replacement and insurance. so my taxable profit for the year is £260.

The only change in my working conditions for the financial year is that I changed employment in June 2016 but all my taxes have been paid through PAYE. I just cant understand why the tax due is so high?

TheCyclingProgrammer

Could you have underpaid tax in your PAYE job? You’ll need to post your full tax return figures to get any useful help.

00ec25

without knowing your employment income and tax paid in it all we can do is play pointless guessing games

qwertyqwerty

Employment up to June 16

7804.00

Tax taken off: 1011.00

Employment from June 16:

31446.00
Tax taken off: 4638.00

This information is from HMRC, I guess sourced from my p45 and p60

Dazed_and_confused

If you have only entered details of the two employments referred to in your latest post and rental profits of £260 then the tax due would be more like £53.

You need to give us the make up of the calculation to know where the £1286 is derived from.

oconnor_m2000

Hi,
recent changes to the calculation of taxes for rental income could be the reason behind why your rental income is higher than your income. In the past, 100% of the interest element of the mortgage could be taken into consideration, this is no longer the case. Secondly, the 10% wear & tear allowance is no longer available. Enter details of S24 tax changes for landords on the internet

[Deleted User]

oconnor_m2000 wrote: »

Hi,
recent changes to the calculation of taxes for rental income could be the reason behind why your rental income is higher than your income. In the past, 100% of the interest element of the mortgage could be taken into consideration, this is no longer the case. Secondly, the 10% wear & tear allowance is no longer available. Enter details of S24 tax changes for landords on the internet

The op has provided us with full details of income and expenditure - no W & T allowance claimed. The op is also a basic rate taxpayer and so I am not sure of the relevance of your point regarding the interest.

Dazed_and_confused

Particularly given the op is presumably trying to complete their 2016:17 return and the interest changes only apply from the current, 2017:18, tax year.

NB. I know op referred to tax bill for "this year" but it is unusual to be trying to file a return part way through the current year