Your tax bill
After you submit your final declaration, HMRC calculates how much Income Tax you owe on your property income. This article explains how that calculation works and what happens next.
How your tax bill is calculated
Your tax bill is based on the profit from your property business for the tax year (6 April to 5 April).
Profit = Rental income minus allowable expenses
HMRC applies Income Tax rates to your profit. The rates depend on your total income and which tax band you fall into.
If you have mortgage interest on residential properties, Section 24 restrictions limit how you can claim relief. Instead of deducting the full interest as an expense, you receive a 20% tax credit. This can significantly increase your tax bill compared to before Section 24 rules applied.
For full details on how tax is calculated, see HMRC's guidance on Self Assessment tax bills.
What you owe after your final declaration
Once HMRC generates your tax calculation, it shows:
- Tax due on your property income for the year you're declaring
- Payments on account for the following tax year (if your tax bill exceeds £1,000 and you haven't paid more than 80% through other sources like PAYE)
- Any balancing payment due (the difference between what you owe and what you've already paid through payments on account or other sources)
Your tax bill might be lower than expected if you've already made payments on account during the year. Or it might be higher than expected if this is your first year owing significant tax and payments on account are being set up for the following year.
Viewing your tax calculation
Provestor shows you your tax calculation, but to check your tax bill - and how much you need to pay:
- Sign in to your HMRC online account
- Navigate to Self Assessment
- View your tax calculation and amount owed
What happens next
Once you know what you owe, you need to pay HMRC by the deadline (usually 31 January following the end of the tax year).
See How to pay HMRC for payment methods and Payment deadlines for when payments are due.