Question about tax return landlords

[Eatentoomanyroses]

I’m really struggling with my tax return. I know I can’t take the mortgage payments off the rent income total but is there a place I do put the mortgage payments? Is there’s some tax relief on these? It’s an interest only mortgage and pay 171 a month. The rent is 645. Help!

I’m filling in the online self assessment.

This says box 44: Gov tax page Annoyingly they don't have the numbers on the online form, but it should be titled Residential property finance costs

You can take off the interest that you pay on a mortgage so if it was a repayment mortgage that was say £500 a month and £100 of that was interest then you would be able to deduct the £100 a month. With yours being an interest only mortgage then you should be able to deduct the full amount as it’s all interest payments.

this is certainly my understanding of it and what I did for quite a few years returns. It was never questioned. Not saying that definitely means I did it correctly right enough!

www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income

read the bit under the heading ‘allowable expenses’

And have a look at the SA105 form and notes that go with it. It should be the sale form as the online version but then at least you can have a look at it and figure out what goes where.

Sadly this changed around 2 years ago. You no longer get any mortgage tax relief.

Honestly pay £300 odd and get an accountant to do it for you (the fee is tax deductible!!)

This is very wrong.

I have an accountant and a commercial property but I have the interest offset against tax on my personal return so it's definitely doable in some way. He submitted mine this week.

Actually double checking it's not classed as a mortgage I have as it's commercial so please disregard my comment!!

My understanding is that you put the mortgage interest in box 44. Although this won't be deducted from the rental income in arriving at your profit, you'll instead receive a tax credit based on 20% of the mortgage interest.

Bit late now, if anyone came to me asking me to do a tax return that’s due in on Tuesday I’d tell them to do one

I think you total up your interest payments for the tax year, ie, if you've got an interest only mortgage, then total up whatever you pay each month for the year, then put that figure in the box and you get 20% tax relief on that.

This from Which?
"Landlord mortgage interest tax relief in 2022-23 Since April 2020, you've no longer been able to deduct any of your mortgage expenses from your rental income to reduce your tax bill. Instead, you now receive a tax-credit, based on 20% of your mortgage interest payments."

Have a look on the Which? website. It has some examples that may help.

The interest goes in residential finance costs box.

@ANiceSliceOfCake ah, I didn’t realise it had changed so much. Now that you’ve said that though I do remember it being talked about in the news at the time. Sorry OP of I’ve confused you even more!

If OP is not sure then worth sucking up the late fee

I’ve got it now. Thank you all. I watched a good video online. It goes in one of the later boxes after you put the rental income in. Turns out I don’t owe anything as I wasn’t working for most of that year. Phew!