Really confused by my tax self assessment

[whataboutbob]

I have actually written to HMRC but in the interim I thought I’d post here.
I have a public sector job where I earn about £40000 taxable pay. On top of that I own 2 rental properties which usually adds up to about £17000 income. Each year my tax calculation is worked out at a figure, say £2500, then they add 50% on top. Why do they charge for 150% of the tax owable? Clearly there’s something I have failed to understand. Thanks for any explanations.

You can reduce the payment on account if your income is looking like it will be less for the current tax year.

If you end up overpaying HMRC will use that to offset your next tax payment. You can also get a rebate of overpaid tax in certain circumstances (trying to remember when). I have never had a problem with reducing the payment on account where required and/or offsetting or getting a rebate.

OP, as others have suggested, make sure that you split the repairs between repairs and improvements.

If you make a loss overall on your rental income, then you can carry it forward to next year.

When you file your tax return, you can get your tax coded out and pay it out of your employment income each month if you want and then you do not need to make a payment on account.

If you think you are making a loss in the current year, then you reduce your payments on account.

This sounds like a situation where doing it yourself could possible cost you tax if you don't know what you are doing, so I would get quotes from local accountants and use one of them in future.

Thanks for your suggestions everyone.@mycatlovesmenotyou I hear what you say re accountants, although I’d worry the savings I’d make in tax would be wiped out by the accountant fees. Still, there’s a firm on the high street near me so I could get a quote. I think all being well I’ll just have enough to pay my tax for 2019-2020, and hope for a better year in 2020-2021.

I would get a few quotes, and smaller firms will be cheaper than big firms. so try small towns rather than city firms.