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
-
Unused sales suppression tools can still trigger penalties
HMRC has published a new compliance factsheet explaining the penalties that can apply where a business possesses an electronic sales suppression (ESS) tool, even if it has never actually been used to suppress a sale. What do you need to know?
-
Treatment of distributions under review
The government has launched a consultation on modernising the tax treatment of distributions and repayments of capital by companies. The proposals could affect the distinction between dividends taxed as income and capital payments subject to CGT. What changes are being considered?
-
HMRC clarifies summer holiday VAT cut
HMRC has published further guidance on the temporary VAT reduction for certain activities during the school summer holidays. The additional detail helps businesses determine which supplies qualify for the relief and, importantly, which do not. What do you need to know?
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.