Mortgage Payments 20% Tax Relief?
Question asked by Joao Vieira 5 days ago
Hi,
Mortgage Payment's are being deducted from total income whilst it is labelled 20% Tax Relief for my 1st quarter, why is it doing this please?
Please advise. Many Thanks
Hi Joao,
Transactions coded to Mortgage Interest will be subject to 20% tax relief. For mortgage payments that include the principal and interest, you must split this when explaining the transaction, please see Section 3 and 3.3 of:
How to explain imported transactions as income or expenses
Tommy
Best answerHi Joao,
Mortgage interest is not considered a standard business expense for tax purposes and should not be deducted as an expense on your MTD Quarterly returns (this is different to the standard Profit and Loss report).
If this is not the case, we will require an example transaction, you can send this to us by clicking the ? icon at the top right and click Send Us a Message including the transaction number.
Tommy
Hi,
But my original question was Interest Only Mortgage Payment's are being deducted from the rental income of each month when it is coded Mortgage Interest 20% Relief? If it is going to be calculated at the final submission why is it discounted now from the rental as an expense?
Please advise.
Many Thanks
Hi Joao,
Thank you for confirming. In this case, it is correct, Mortgage Interest is subject to the 20% tax relief and will be included in the year end tax calculation.
Tommy
Hi Tommy,
When you say split the transaction, its only a BTL mortgage interest only payment. there is no payment to the mortgage capital balance.
You must 