I have been sent a tax return
I am on PAYE and have no other income.
I have a £220,000 mortgage for my house, which I purchased last year. I pay 3% per annum in interest
I deliberately kept back £100,000 to pay for building work on my house, which I put in an interest bearing account earning 1.5% interest before tax.
Now the taxman says that I have to pay 40% tax on the interest for my £100,000 savings, in spite of the fact that it is from borrowed money that is I already pay 3% interest on. This means that I effectively have a mortgage rate of 3.9%.
I realise I have been stupid but is there anything I can do about this apart from paying off my mortgage and not doing the building works. The tax man gets less from me next year and I spend less on building works, which in a small way is worse for the economy.
I am on PAYE and have no other income.
I have a £220,000 mortgage for my house, which I purchased last year. I pay 3% per annum in interest
I deliberately kept back £100,000 to pay for building work on my house, which I put in an interest bearing account earning 1.5% interest before tax.
Now the taxman says that I have to pay 40% tax on the interest for my £100,000 savings, in spite of the fact that it is from borrowed money that is I already pay 3% interest on. This means that I effectively have a mortgage rate of 3.9%.
I realise I have been stupid but is there anything I can do about this apart from paying off my mortgage and not doing the building works. The tax man gets less from me next year and I spend less on building works, which in a small way is worse for the economy.