08 Feb Furnished Holiday Let Changes – 1 April 2023

Posted at 11:08h in Something New, Limited Company, Tax, Uncategorized by Kevin Batty
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Following consultation on the business rate treatment of self-catering accommodation, the government have provided details of how the existing rules will be strengthened and of new regulations that will take effect from 1 April 2023.

At the moment, people who own second homes in England can avoid paying council tax and can access small business rates relief by declaring an intention to let the property out to holidaymakers. However, concerns have been raised that many people never actually let their homes and leave them empty and are therefore unfairly benefiting from the tax break.

From April 2023, second homeowners will have to prove holiday lets are being rented out for a minimum of 70 days a year to access small business rates relief, where they meet the criteria.

Holiday let owners will have to provide evidence such as:

  • the website or brochure used to advertise the property
  • letting details
  • receipts

Properties will also have to be available to be rented out for 140 days a year to qualify for this relief.

From 1 April 2023, a property will only be assessed for business rates rather than council tax if the owner can provide evidence that:

  • it will be available for letting commercially, as self-catering accommodation, for short periods totalling at least 140 days in the coming year
  • during the previous year, it was available for letting commercially, as self-catering accommodation, for short periods totalling at least 140 days
  • during the previous year, it was let commercially, as self-catering accommodation, for short periods totalling at least 70 days

The Valuation Office Agency will be responsible for determining whether a property should be assessed for council tax or business rates under this new system.

There are different occupancy rules which HMRC use to determine if a property is classed as a Furnished Holiday Let (FHL) or rental income.

If you think that your property may fall into this category and you need any further guidance, please contact us.