BTL losses brought forward and set off?

by Readers Question

8:58 AM, 12th June 2018
About 3 years 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


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17:32 PM, 12th June 2018
About 3 years ago

Reply to the comment left by Appalled Landlord at 12/06/2018 - 13:50
I concur with Nikesh, the result from each year's individual return should be the profit or loss arising from THAT year, the tax payer records the rolling balance.

Appalled Landlord

19:22 PM, 12th June 2018
About 3 years ago

Reply to the comment left by at 12/06/2018 - 17:32I told you how HMRC’s system worked to provide the correct figure, then you asked if I was sure, asserting you were pretty sure I was wrong. So I explained it again. Now you are trying to convince yourself that you haven’t been doing it wrong.
As you addressed your comment to me I feel obliged to reply. But as there is so much wrong in those three short lines, it will take a while.
Firstly, since you’re concurring with what Nikesh wrote you are agreeing that HMRC do indeed want you to record the loss to be carried forward on their system - but by way of a note this year because of their glitch which stops people from putting the right figure in for losses brought forward. His comment alone should have told you that it was a mistake that the full loss could not be input.
Secondly, the result should not just be the profit or loss arising in THAT year. If you ignore losses brought forward you will pay too much tax.
Thirdly HMRC do not want you just to record the loss carried forward privately.
As a matter on interest, what did you think the box on the form was for that read “Loss to carry forward to following year, including unused losses brought forward”?
HMRC’s program calculated the figure for me, correctly, when I put the full loss figure in. And it did so in every previous year.
But if you’re pretty sure it doesn’t, thanks for enlightening me. What do I know, a mere accountant who has been filling in the property income pages for over 30 years?
However, bearing in mind that John started this thread because after 12 years he could no longer input the full loss, and Nikesh rang HMRC because he couldn’t either, do you think it possible that we three were right and you are wrong?

Helen Mir

13:17 PM, 8th January 2019
About 2 years ago

I've just come across this thread as I am trying to submit my return for 2017/18 and have encountered the same issue - after also doing it the same way for several years using HMRC's online portal before now, and not ever having an issue before now. This specific problem/bug is not listed on HMRCs list of exclusions, which is strange if they have known about it for this long.
So if I understand correctly, i should only put in the portion equivalent to this year's profits in the Losses to carry forward from previous years - this brings the profit to zero and means the tax calculation is correct. I will then put the remainder loss to carry forward to futures years in the notes box so that it is there on the return for future years?
So I can do this and still file online - and not have to file a paper return?
Thanks in advance for your help.

Appalled Landlord

13:38 PM, 8th January 2019
About 2 years ago

Reply to the comment left by Helen Mir at 08/01/2019 - 13:17
Hi Helen

Yes, unless you can input the figure in a box for remaining losses to carry forward.

Either way, you can still file online.

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