Nearly half a million households fell into rental arrears during the pandemic as unemployment soared, according to a report by the think tank the Resolution Foundation.
Landlords who lost rental income between April 2020 and April 2021 may not realise they can still claim tax relief for those periods, as rental losses made in the previous year can be offset against profits made in the current or future tax years.
Chris Etherington of tax firm RSM said it caught many of his clients out because HMRC’s systems will not recognise a loss from a previous year unless it is entered by the taxpayer. So it is up to the taxpayer to find details of their rental income and report this on their tax return.
“Some landlords could therefore be missing out on utilising previous losses against their rental profits,” Mr Etherington said.