Self Assessment Query - Panicking Now!!!

Hi everyone, was just sending off my Form 11 on line and went to the calculate tab where it says I owe 3k!!!!! This is my first year doing it myself and not sure if I've completed it correctly. The basis of my return is as follows:

PAYE employee - No employment income tax liability

The reason I'm doing a self assessment is because I have 2 rental properties (never intended in having these even in the good times just I had a house, was moving to another in a different county, bought it, then met my husband who had a house and had to move back to my original county. Can't sell either of them for the last 2 years!) Anyhow, I had a tax consultant to do the return for me for the past 2 years and had no liability. Now this year as funds are very low decided to do it myself thinking it would be very straight forward.

Here are the figs:

2 x rental property total rental income - 11,525
Interest Only on both mtg total - 9,793
Cost for 2009:
Insurance for both - 454
Refuse - 64
PTRB - 70
New Sofa - 855
Paint - 221
Bedroom Kitout - 351
Fridge Freezer - 360

I understand that I can only allow for 75% of mtg interest which would be 7,345. This from total amount of rental income at 11,525 is 4,180. Of the other cost, what can I deduct from the 4,180 figure? And is there anything else I can deduct.

Also, what, if any preliminary tax for 2010 do I need to pay at this stage, have never paid preliminary before.

To anyone that can help me with this, many many thanks. It's hard to understand that I have a tax liability as both properties are on int only, I'm paying out 200 euro second property tax for each of the each year and with wear and tear there's always something that needs replacing. I suppose really what I'm trying to say is that both are costing me every month, never mind the struggle it'll be next year when they have to go back on capital & interest.

Apologies, I don't mean to moan, I hold my hands up to my responsibilty, I did sign both mortgage offers and purchase aggreements but it just seems to be a constant financial drain never mind paying tax on this "privillage"!

I'm 8 months pregnant at the moment and thought I'd have the baby this morning when I saw the figs!!!! Please someone offer me some good news!

Thankyou

Your missing wear and tear allowance

What expenses can be claimed for Wear and Tear?

If a premises is let for residential purposes and it is furnished, a claim can be made for a wear and tear allowance based on the cost of the furniture and fittings. It will be necessary to retain an itemised list of expenditure incurred each year.

• With effect from 4 December 2002 the allowance is 12.5% per year over 8 years.
• For the period between 1 December 2001 and 3 December 2002 the allowance was 20% per year over 5 years. Transitional provisions apply allowing the rate of 20% per year over 5 years if the item was acquired under a written contract before 4 December 2002 and the expenditure was incurred before 31 January 2003.
• Prior to 1 January 2001 the allowance was 15% per year for the first 6 years and 10% in the 7th year.

catherinep said:

I understand that I can only allow for 75% of mtg interest which would be 7,345.

Click to expand...

You can allow for 100% of the mortgage interest up to the end of April 2009, it was 75% from then on.
This would give you a total of 8,160 allowable interest (assuming interest was the same over the 2009 period - check your bank statements).

Preliminary tax is payable if you think you will have a liability in the tax year concerned. You can estimate it and should pay at least 90% of what you expect your final tax bill for the year month by month.

catherinep said:

:
PAYE employee - No employment income tax liability

Click to expand...

Are you and your husband jointly assessed for income tax or assessed independently? Have you made allowances for your tax credits Or are these transfered to your husband?

my rough figures (I'm not an accountant!)
Income:
11,525

Allowable Expenses:
Interest: 8160
Insurance:454
PTRB: 70
Sofa: 106 (12.5% each year for 8 years)
Paint: 221
Bedroom Kitout: 44 (12.5% each year for 8 years)
Fridge Freezer: 45 (12.5% each year for 8 years)
Total: 9100

Taxable Portion (11,525 - 9,100) = 2425

You'll have to work out the tax bit yourself, prsi, income levy, etc.
Also some of the bedroom kitout could be written off in year one if they are small things like curtain poles, etc. I tend to only depreciate significant items over 8 years (e.g. furniture, white goods).

I suspect there is something awry with the OP's figures. A tax liability of €3k on income of €4,180 does not stack up - it would appear that there is something radically wrong with either her own or her husband's PAYE, eg cutoff points, claims for allowances, credits etc.

Hi Everyone,

Many thanks for all your help. I've gone through it with a fine tooth comb at this stage taking all your explanations on board. Great tip with the 75% only from May '09, that gave me back a few quid. Cheers infinity.

So now, my expenses v my rental income is at a negative of about 50 euro therefore I don't have a liability for the rental income. I can still process my gp and hospital bills which I realise should actually give me a refund of about 200 euro. However, the form online still tells me that I owe 1,600.

Looking at my tax credits, it's allowing me a credit of 1,830 - I understand single allowance. I got married on May 1st 2009 and the form says if your status changes throughout the year file as married but separate treatment. However, when I look at both my husbands and mine P60, they both give a tax credit of 3,660.

So, from what I can see, my liability is steming from my tax credits - PAYE income rather than the rental income. How do I tackle this. I would of thought that my P60 is correct as my employers would not of changed my status prior to our marriage date.

Any suggestions?

And again, I really appreciate all of your help with this. Thanks

you need to claim single credit and PAYE credit. It sounds like you're only claiming one of them.

Sybil

thanks Mrs Vimes,

your bang on, I hadn't ticked the box for PAYE Creits.

Everyone, thank you so much for your help. I'm back to a refund situation.

Really appreciate it.

Ta