Holiday let landlords unable to carry back losses
The current Finance Bill was published on 11 March 2021. However, some changes have been made during its passage through Parliament. Why is one subtle change bad news for owners of furnished holiday lets?
Budget 2021 included the announcement that there will be a temporary extension to loss relief for self-employed traders. The extension allows losses from 2020/21 and 2021/22 to be carried back against profits of the same trade from the previous three tax years. One of the conditions for using the extension is that the taxpayer must have made a sideways relief claim under s.64 Income Tax Act 2007 first, or have a loss that would be eligible for s.64 if there were profits to offset.
Initially, the Finance Bill included a clause saying that furnished holiday letting (FHL) businesses were to be treated as eligible for the extension. However, this was confusing as FHL losses are not eligible for s.64. It seems that the government has realised this because the clause has now been deleted. Unfortunately, FHL owners who will undoubtedly have been hit had by the recent lockdowns will not be able to carry back losses against previous profits.
Related Topics
-
Tribunal rejects reliance on adviser as reasonable excuse
A recent First-tier Tribunal decision has confirmed that relying on an accountant does not automatically amount to a reasonable excuse for missing a self-assessment deadline. The case highlights the limits of delegating tax responsibilities. What does this mean in practice?
-
HMRC issues new wave of offshore “nudge” letters
HMRC has issued a further round of “nudge” letters targeting individuals it believes may have undeclared offshore income or gains. The letters form part of HMRC’s ongoing use of data from international information exchange agreements. What should you do if you receive one?
-
Payroll changes for 2026/27
As the end of 2025/26 draws closer, HMRC has published a raft of updates and reminders for employers. Which changes do you need to be aware of that might impact your payroll in 2026/27?
This website uses both its own and third-party cookies to analyze our services and navigation on our website in order to improve its contents (analytical purposes: measure visits and sources of web traffic). The legal basis is the consent of the user, except in the case of basic cookies, which are essential to navigate this website.