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Landlords are missing out on hundreds of thousands of pounds in not claiming energy saving tax allowances.

According to Richard Mannion, national tax director at law firm Smith & Williamson, private and corporate landlords are not claiming back tax on energy efficient improvements they have made to their rental properties, as a result of this hundreds of thousands of pounds are going unclaimed each year.

Landlords can claim back the costs of buying and installing energy saving items in the properties they rent out against their taxable profits. This will not only save landlords cash in the short-term, but will also give their tenants long-term savings with lower energy bills.

Landlords Energy Saving Allowance is a tax allowance and landlords can’t claim if they are already claiming an allowance under the Rent-a-Room scheme, or if they have a property rented out as furnished holiday accommodation, or if the energy saving item is installed in the course of construction. Landlords can claim back up to £1,500 for each dwelling house.

Mannion says: “There has been a low level of claims submitted under the Landlord’s Energy Saving Allowance despite the availability of the allowance being extended from private landlords to corporate landlords in summer 2008.

"Making energy efficient improvements to a property will reduce the cost of energy bills as well as maximise the tax savings available under LESA. It’s a win-win situation for landlords. In addition to saving themselves money, they’ll save their tenants money and do something good for the environment.”

SOURCE: Smith & Williamson, 17/03/09

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