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Rental income deduction/relief

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  • ileven1225
    ileven1225 Posts: 176 Forumite
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    Mahsroh wrote: »
    Yes, this would be correct. If you notified them quite late in the day and they send a letter asking you to complete a tax return close to the deadline they do give you extra time to pay. Just bear in mind there may be some interest charges on whatever you owe, but (I'm assuming you wont owe significant amounts, I.e. in the thousands) - the interest charges should be negligible.

    What interest rate they will charge? My annual salary is £42k and the rental income (after expense deduction) is £6k. So unfortunately I think i have to pay £1k (43k-42k) for 20% tax and the rest £5k for 40%, it equals to £2.2k. How much interest they will charge on it?

    Thanks.
  • Mahsroh
    Mahsroh Posts: 769 Forumite
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    ileven1225 wrote: »
    What interest rate they will charge? My annual salary is £42k and the rental income (after expense deduction) is £6k. So unfortunately I think i have to pay £1k (43k-42k) for 20% tax and the rest £5k for 40%, it equals to £2.2k. How much interest they will charge on it?

    Thanks.


    Not sure to be honest. Someone else may be able to advise. Let me go back to records from when I had a similar thing. To be fair, they may not bother charging as long as you submit your return by 31st. Not sure if they give a couple of months grace.


    I'll see if I still have the record of how much I was charged, and get back to you.
  • Mahsroh
    Mahsroh Posts: 769 Forumite
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    Mahsroh wrote: »
    Not sure to be honest. Someone else may be able to advise. Let me go back to records from when I had a similar thing. To be fair, they may not bother charging as long as you submit your return by 31st. Not sure if they give a couple of months grace.


    I'll see if I still have the record of how much I was charged, and get back to you.


    Just checked, it was 3%.


    So in your case, if you owe £2200 then you're looking at £66 per year, so if we're talking about 3 months you're looking at £16.50 total..... So nothing earth shattering (assuming same interest rate of course).
  • ileven1225
    ileven1225 Posts: 176 Forumite
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    Mahsroh wrote: »
    Just checked, it was 3%.


    So in your case, if you owe £2200 then you're looking at £66 per year, so if we're talking about 3 months you're looking at £16.50 total..... So nothing earth shattering (assuming same interest rate of course).

    Thanks a lot!
  • 00ec25
    00ec25 Posts: 9,123 Forumite
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    ileven1225 wrote: »
    What interest rate they will charge? My annual salary is £42k and the rental income (after expense deduction) is £6k. So unfortunately I think i have to pay £1k (43k-42k) for 20% tax and the rest £5k for 40%, it equals to £2.2k. How much interest they will charge on it?

    Thanks.
    yes, 2.2k of tax, and the official interest rate is 3%

    https://www.gov.uk/government/publications/rates-and-allowances-hmrc-interest-rates-for-late-and-early-payments/rates-and-allowances-hmrc-interest-rates
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