Commencing 6 April 2017, income tax relief for interest payments & finance costs will be restricted to the basic rate of income tax.
The restriction will be phased in over four years, the cost restricted to basic rate each year is as follows:
2019/20 75% and
The way tax relief for interest is given is also being changed. Your tax liability is initially calculated without any relief for interest costs at all. The tax relief is then given as a reduction in the tax liability.
This compounds the impact of the change and will push more people into the higher tax rates.
For more information, please contact Lesley Sutton on 01484 550037 or email email@example.com.