Buy to let repayment mortgage tax

[Dmr295]

Hi, I have purchased a house on a capital repayment mortgage as this is somewhere I plan to live in a years time. The mortgage is £830/month and I can't remember the exact split but let's say £500 is interest and £330 is capital. I have tenants moving in this week who will be paying £900/month and agents fees are £35 a month. What will my tax obligations be, I'm getting confused with what my profits are and what will be taxable income. There is also the property allowance I've seen although need some further advice. I earn £51k in my job so am just in the HR band. Please can someone advise on my potential tax liability so I can set this aside.

Thanks

[D&C]

Based on what you have posted from 6 April 2020 your monthly profit is £865.

From 6 April 2020 you can no longer claim finance costs such as the interest as an expense.

You may well be able to claim a tax deduction (based on your example) worth £1200 off your annual tax bill (£500 x 12 = £6000 x 20% = £1200) but that is a complex area and you really need to read up on residential landlord finance costs.

Claiming that tax deduction may mean you cannot claim the property allowance so you will need to weigh up which is more beneficial overall as it could be one or the other not both.