The Tax Return Filing Deadline Is Fast Approaching
Don't get it wrong ...
POSTED BY ROGER EDDOWES ON 21/01/2019 @ 8:00AM
The 2017/18 tax return filing deadline is fast approaching and you really don't want to get your tax return wrong, or even worse, not file one at all ...
The 2019 tax return filing deadline is fast approaching and you really don't want to get your tax return wrong!
copyright: hyrons / 123rf
There are two important changes for the 2017/18 tax return which we have discussed in previous blog posts, but are worth mentioning again:
Mortgage interest relief
If you are a landlord, remember that 2017/18 is the first year that mortgage interest relief is being restricted and phased out for higher rate taxpayers. It seems ages since George Osborne announced it pre-Brexit, but 2017/18 is the first year that is affected.
75% of the interest may be offset against the rental income rather than a full 100%. In the following tax years, it continues to be phased out so in 2018/19 only 50% may be claimed, in 2019/20 only 25% may be claimed and in 2020/21 nothing may be claimed.
All is not lost though as there is the still the ability to claim relief at 20% on the restricted element once the tax on the rental income has been calculated. Sound complicated? Well yes, it's not easy, hence why HMRC are expecting a swathe of incorrect tax returns.
The introduction of an annual tax-free allowance for property and/or trading income
This will be good news for some as you can get up to £1,000 each tax year in tax-free allowances for property or trading income and, if you have both types of income, you'll get a £1,000 allowance for each.
The trading allowance for individuals with trading income from:
casual services, for example, babysitting or gardening
hiring personal equipment, for example, power tools
HMRC state that if your annual gross income from these is £1,000 or less, you don't need to tell HMRC, unless you can't use the allowances. In addition, this allowance doesn't apply to trading income from a partnership.
There is further good news on the property allowance:
If you own a property jointly with others, you're each eligible for the £1,000 allowance against your share of the gross rental income
If your annual gross property income is £1,000 or less, you won't need to tell HMRC, unless you are unable to use the allowance
Unfortunately, you can't use the allowances if the income comes from a company that you or someone connected to you owns or controls, a partnership where you or someone connected to you are partners, or your employer or the employer of your spouse or civil partner.
If you choose to claim the allowance you are unable to claim any other expenses against this income source. This includes the rent a room relief when renting a room in your own home.
"Would you like to know more?"
If you'd like to find out more about the tax return filing deadline, mortgage interest relief or the annual tax-free allowance for property and/or trading income then do give me a call on 01908 774320 or click here to ping me an email and let's see how I can help you.
Until next time ...
If you're looking to work with a leading firm of accountants, then why not visit our website which you can find at www.essendonaccounts.co.uk and let's see how we can help you!
More about Roger Eddowes ...
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves Ã¢â‚¬Ëœgetting his hands dirtyÃ¢â‚¬â„¢, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
More blog posts for you to enjoy ...