BTL losses brought forward and set off?

by Readers Question

2 months ago

BTL losses brought forward and set off?

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BTL losses brought forward and set off?

I have been submitting my self assessment tax return for the past 12 years, however for 2016_17 which I am attempting to submit now I am coming across something that doesn’t seem to be right.

For the past 6 years my small portfolio of 4 flats has made a small profit, but the prior 6 years it made significant losses, so I have always been able to offset the profit against the previous losses. There is still a net loss over the 12 years.

However when completing the tax return (using the HR Revenue & Customers online service) when I try to add the “loss brought forward used against this year’s profit” I get an error message to say “loss brought forward used against this years profit must not exceed “adjusted profit for the year, please amend.

Usually the previous years losses have been reduced by the profits I am now making, but for some reason I am not allowed to do this now?

Would you know why this is?

Many thanks



Neil Patterson

2 months ago

Hi John,

Both myself and Mark have our tax returns submitted by our accountants at Pacific so we are not familiar with the online forms. Hopefully another reader can help 🙂

However, as a logical guess does the form intend to mean that you can't submit or use more of the loss than your profit so the two cancel out evenly for the tax year?

Hamish McBloggs

2 months ago

You are not allowed a negative profit.

You can only go as low as a zero profit.

You are permitted to carry forward the loss which one would hope is eroded by subsequent years' profit until it is used up.

So presumably you have to put in a figure that exactly cancels the profit to make the balance zero then keep a record of the remaining loss you have left to carry forward to the next year.

I used to do ours but hated every minute so for about £120 a year we have an accountant do this for us now. I just keep the records.


Lesley Clarke

2 months ago

Hamish your accountant is really cheap. I pay £300 for an accountant to do my tax return for my three properties.

Appalled Landlord

2 months ago

Hi John

Does it gives you the right figure for losses carried forward to the following year? That is the important thing.

A few years ago when they changed the online self-assessment form I did what the caption seemed to want and only entered a brought forward loss equal to that year’s profit. It then told me that I had nil losses to carry forward! That’s one way of increasing the tax take.

So I then changed my entry to the whole loss brought forward (as in previous years), and got the correct loss to carry forward.

Hamish McBloggs

2 months ago

Reply to the comment left by Lesley Clarke at 12/06/2018 - 12:15
There should've been an 'each' after the £120 as Mrs Hamish has hers done too.

Does 2 tax returns 2x£120 + vat make it similar?

Lesley Clarke

2 months ago

Reply to the comment left by Hamish McBloggs at 12/06/2018 - 12:40
Mine is one tax return for three properties - £299 inc of VAT


2 months ago

Reply to the comment left by Appalled Landlord at 12/06/2018 - 12:17
Are you sure that the system aggregates the losses to carry forward, I 'm pretty sure it doesn't?

Appalled Landlord

2 months ago

Reply to the comment left by at 12/06/2018 - 13:21
Hi moneymanager

I don’t know what you mean by the system aggregating losses. If you mean does HMRC’s computer remember and display the loss carry forward from the previous year, then the answer is no, unless they have changed the program for 2017/2018. I have not done my return for that year yet.

However, up to 2016/2017, if you input the full loss brought forward from the previous year, the computer would deduct the current year’s profit and show the loss remaining to carry forward, if any.

So if you only input the profit amount as the figure for the loss brought forward, the computer would not show any loss carry-forward.

Hamish McBloggs

2 months ago

Reply to the comment left by Lesley Clarke at 12/06/2018 - 13:00
We have various company accounts done too ... perhaps there's a discount.

nikesh chauhan

2 months ago

Reply to the comment left by Neil Patterson at 12/06/2018 - 10:25
I had a similar issue and rang HMRC technical department who advised there is a issue with the form. Told me to input the profit figure to make a balance of zero and to write a explanation in the notes section detailing the remaining loss to carry forward.

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