Landlords Energy Saving Allowance (LESA)

October 17, 2011

CIA Let Property Blog

LESA- How to make your tax cheaper when energy saving...

If you are a Landlord and make energy-saving improvements to your property, you could reduce the amount of tax you pay by claiming for LESA (Landlords energy-saving allowance). Find out if you are eligible, what the allowance covers and how to apply for it with the information below.

Who can claim LESA?

You can claim LESA if you are a landlord renting out residential property and are either:

  • An individual landlord – someone who pays for income tax on profits from letting.
  • A corporate landlord – someone whose rental business is registered as a company and you pay corporation tax on your profits from letting.

You can’t claim if you are a landlord:

  • Claiming an allowance under the ‘rent a room’ scheme.
  • Of a property rented out as furnished holiday accommodation.

LESA- How much is it and what does it cover?

LESA is not a cash payment, it is only a tax allowance which allows you to claim up to £1,500 against tax every year. This allowance can be claimed for properties you rent out in either the UK and/or abroad. LESA can be claimed for the costs of buying and installing certain energy-saving products for properties you rent out, but only for what you actually spend.

You can claim LESA for what you have spent on:

  • Cavity wall and loft insulation, after 6 April 2004
  • Solid wall insulation, after 7 April 2005
  • Draught proofing and hot water system insulation, after 6 April 2006
  • Floor insulation, after 6 April 2007

You can claim LESA up until 1 April 2015, after this availability of this allowance will end.

When was the allowance available from?

LESA has been available for individual landlords since 6 April 2004 and for the corporate landlords 8 July 2008.

How do you apply for LESA?

When filling out your tax return this is when you should claim for the allowance.

For individual landlords:

If you are an individual landlord, you claim the allowance when you fill in your self assessment tax return. You’ll need to fill in the costs of buying and installing the energy saving products in the ‘landlord’s energy savings allowance’ box on:

  • The UK property pages – If your property is in the UK
  • The foreign pages under the section ‘ income from land and property abroad’ – If your property is outside the UK.

The amount that you enter on the form is claimed against your taxable profits from renting out your property. This means when you are filling out your tax return you should deduct the amount you are claiming from this allowance from your income. This then reduces the amount of tax you are paying for the rest of the year.

You can fill your self assessment tax form online on the HM Revenue and Customs (HMRC) website.

For corporate landlords:

If you are a corporate landlord, you can claim LESA under ‘ allowable business expenses’ on your corporation tax return form.
We hope you found this information useful. Please remember to use CIA Insurance when you or your family and friends need motorcycle insurance, landlords insurance or commercial insurance.

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