Landlords could be held responsible for unpaid gas and electricity charges if energy suppliers are not given the correct information when tenants move in or out of a property.
The proposal is outlined in a consultation paper published by Ofgem around the time of the Budget. It would introduce a legal requirement for landlords to provide energy suppliers with accurate and timely details about changes in occupancy.
Under the proposed rules, landlords could become liable for energy costs if neither they nor their tenants provide the required information.
In a separate development, letting agents may also be required to report landlords’ rental income and personal details to HMRC.
Landlords Could Be Liable for Energy Debt
The consultation sets out plans for new legislation that would change the process for handling energy accounts when people move home.
The government wants landlords to have a formal duty to notify suppliers when tenants move into or leave a property. If the necessary details are not provided by either party, the landlord could be held responsible for the outstanding energy charges.
The proposed changes would bring the rules closer to the existing arrangements for water bills in England and Wales.
Unpaid Energy Debt Continues to Rise
According to research reported by The Telegraph, tenants moving between properties without paying their final energy bills could account for up to 40% of the estimated £6 billion in domestic energy debt.
Ofgem has warned that the overall figure could increase to £11 billion in the coming years.
The proposals, supported by the Department for Energy Security and Net Zero, aim to help energy suppliers identify who is responsible for outstanding payments.
Ofgem also found that while some households genuinely struggle to afford their bills, others have the means to pay but choose not to.
Previous Concerns Over Prepayment Meters
Domestic energy debt was estimated at around £1 billion in 2020. However, rising energy prices placed greater pressure on household finances, leading suppliers to increase the use of prepayment meters.
Almost 100,000 households were forcibly moved onto prepayment meters through court warrants, while some smart meters were switched remotely.
In 2023, Citizens Advice reported record numbers of people being left without heating or electricity because they could not afford to top up their meters.
The government stepped in following reports that British Gas debt collectors had entered homes to install prepayment meters, including properties occupied by vulnerable people.
Letting Agents Could Face New HMRC Reporting Duties
Separately, new proposals could require letting agents and tenancy deposit protection schemes to share landlords’ rental income and personal information with HMRC.
Government plans outlined in a consultation would require property managers to provide details such as the rent received, landlords’ dates of birth, National Insurance numbers and tenancy information.
HMRC already sends out more than 10,000 notices each year requesting information from letting agents. However, the government says the current approach relies on a manual process that requires considerable resources.
Concerns Over Additional Reporting Requirements
The proposed reporting rules have raised concerns among industry professionals about the additional administrative work facing letting agents and landlords.
Greg Tsuman, managing director of lettings at Martyn Gerrard, told The Telegraph that introducing these requirements alongside the landlord register could create an unmanageable burden for the sector.
He argued that the planned rental database could already provide HMRC with a central source of information to help ensure landlords pay the correct amount of tax.
Rather than introducing another separate reporting system, he suggested that the government should invest in making the rental database work effectively and cost-efficiently for everyone involved.
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