Changes to Business Rates Rules for Furnished Holiday Lets
Michael Gove MP has recently announced changes to the rules for Furnished Holiday Lets (FHLs) in England.
FHLs are classed as commercial lets & as such, they are liable to business rates rather than council tax. The business rates payable are usually zero because of the Small Business Rates Relief (SBRR) rules.
From April 2023, a property in England will be assessed for business rates rather than council tax only if the owner can provide evidence that:
- It will be available for letting on a commercial basis, as self-catering accommodation, for short periods totalling at least 140 days in the year after the day in question
- 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 actually let commercially, as self-catering accommodation, for short periods totalling at least 70 days.
A “day” for this purpose is based on the position at the end of the day. For example, a property let out from Friday evening to Sunday morning would have been let for two days (Friday & Saturday).
There are no special rules for those with multiple units on one location.
The new rules will only apply to buildings (or self-contained parts of buildings) that would otherwise be assessed for council tax. Therefore, shepherd’s huts, caravans & similar units will not generally be subject to these rules as they are assessed for business rates separately.
Newly available lets will be liable for council tax for each day until the property has been available for 140 days & let out for 70 days. On the day that these two criteria are met it will qualify for a business rates assessment.
If you have any questions, a member of our tax team would be happy to help. Give us a call on 01246 274121 (Option 2) or drop us an email: taxteam@mitchellsaccountants.co.uk