Rent arrears is rent that fell due and was not paid, measured at a date. It sounds simple and it is the figure most landlords keep least well, because a tenant who pays late, pays partially or pays irregularly leaves a trail that a bank statement alone does not explain. This page is for the UK buy-to-let landlord who needs the meaning of rent arrears as the rent roll records it: what counts, how due and received are kept apart, how the arrears figure is read at year end, and how it relates to the income figure on the self-assessment property pages. The landlord accounts tool on this site keeps the rent roll that produces it.
The definition, precisely
On any date, arrears is the total rent that has fallen due under the tenancy up to that date, less the total rent received up to that date. A tenant who pays on the fifth when the rent is due on the first is in arrears for four days every month; a tenant who pays half is in arrears for the other half from the due date until it is paid. The figure is a balance, not an event, and it can only be read from a record that holds both sides.
Rent due and rent received are two columns
The rent roll records, per tenancy, each rent that falls due with its date and amount, and each payment received with its date and amount. Arrears at any date is the difference between the two running totals. A landlord who records only what arrives cannot see arrears until the tenant stops paying altogether; a landlord who records both sees the pattern the month it starts.
Reading the figure
A small, stable arrears balance that clears each month is a late payer. A balance that grows each month is a tenant in difficulty. A balance that appears once and is repaid is an event to note and move on from. The rent roll's job is to show which of the three you are looking at, per tenancy, so that the conversation with the tenant happens early and on the facts.
Arrears and the year-end income figure
Rental income for the self-assessment property pages is normally the rent received in the year, so unpaid rent is not income until it is paid. Arrears at year end therefore sit outside the income figure, which is why the rent roll has to carry them separately: the accountant will ask what is owed as well as what came in, and the answer should be a figure from the record, not a recollection. The landlord accounts tool here keeps both.
What this page does not do
Recovering arrears, serving notices and the possession process are lettings operations and legal matters outside this hub's scope; take advice on those. What the rent roll does is give you the figure, dated and per tenancy, that any conversation, agent or adviser will need first.
Questions people ask about rent arrears meaning
Is late rent the same as rent arrears?
Late rent is arrears for the days between the due date and the payment. The rent roll shows it as a balance that appears and clears; a persistent pattern is worth noting even when it always clears.
Does rent arrears count as rental income on my return?
Rent is normally taxable when received, so unpaid rent is not income until it is paid. Keep the arrears figure separately in the rent roll for the accountant.
How should a landlord record partial payments?
As payments received on their dates against the rent due, so the arrears balance is the difference. Never adjust the rent due to match what was paid.