By Lucy Metcalf
Tax Partner, Lucy Metcalf, explains the Business Rates criteria changes for holiday let properties.
Currently, in England, a holiday let property is liable to pay Business Rates, rather than Council Tax, if the owner declares that they intend to make their property available to let for 140 days in the coming year.
The rateable value of most holiday lets is such that approximately 96% of all holiday let properties end up not paying any Business Rates as they qualify for Small Business Rates Relief.
Back in November 2018 the Government launched a consultation as they were concerned that owners of properties which were not being ran as genuine holiday lets were able to reduce their tax liability by declaring that their property was available to let, whilst making little or no effort to actually let it out.
Further details will be announced soon, but the Government have now announced that they will legislate to change the criteria determining whether a holiday let is valued for Business Rates to account for the actual days that a property was let.
We await details of how this will work in practice and hope that the new rules will factor in a grace period to account for periods of non-letting due to Covid.
If you have any queries on this in the meantime please contact one of our Tax Specialists.
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