-
Ages ago I was looking into getting a new mortgage and went to RBS to see about their one account. They were highlighting this back then - but only for self employed, not us working through ltd companies -
News to me and since I've been a self employed sole trader for 18 years as well as having Ltd companies for contracting purposes I will take a look into this.
It's not April the First or anything is it?Leave a comment:
-
good news !
anyone doing this?
http://www.independent.co.uk/news/bu...rc-856994.html
Self-employed can set mortgage costs against tax, says HMRC
By James Daley, Personal Finance Editor
Monday, 30 June 2008
HM Revenue & Customs has started allowing self-employed workers to offset their mortgage interest and council tax against their annual income tax bill; an expense that accountants have historically believed to be off-limits.
New guidance issued by HMRC clarifies the validity of writing off mortgage payments, council tax and even home insurance against income tax for the first time. The move is likely to be welcomed by Britain's 3.6 million self-employed at a time when food and fuel costs are rising, and the economy is slowing.
Angela Beech, a partner at the accountancy firm Blick Rothenburg, said her company had been given the impression in the past that offsetting mortgage payments against income tax could have detrimental knock-on effects for the self-employed. "Historically, we steered clear of it," she said. "There was a fear that if you took mortgage interest as an expense, it could put your house in jeopardy of being free of Capital Gains Tax (CGT)."
Currently, taxpayers do not pay CGT on profits made on the sale of their primary residence, but if the residence was considered to be mainly used for business purposes, there was a risk that it could be deemed liable.
Ms Beech said the new guidance by HMRC had also usefully clarified the amounts that people can claim as expenses – not just for mortgage interest, but for other expenses such as heating and electricity. "These examples, which appear on the Revenue's website, are the ones which the inspectors use, so they're very useful," she added.
A spokesman for the HMRC said that in the Revenue's eyes, the self-employed had always been able to offset mortgage interest against income tax. However, he conceded that this was the first time it had been formally clarified in HMRC guidance documents. He added that the guidance had been released several weeks ago, but accountants had only begun to notice now.
"When there's good news on things that you can claim against, they always tend to just slip it into the manuals," said Ms Beech. "They only shout about it when they're announcing a crackdown."
Leave a comment: