Council Tax on a holiday Let

[JohnDenise]

I am in the process of buying a property in the Lake District and am confused about the council tax payment i will incur.

The Rateable value is £2250 and the property will be available for rent all year so I think the property will be eligible for Small Business Rate Relief and I will get a reduction in council tax (to £0 I think!)

The thing that is troubling me is that I dont have a Business, do I still qualify for this Relief?

Ta

[Nemo]

Welcome!

You need to understand the rules for FHL - furnished holidays lets. Plenty to read here:
https://www.gov.uk/government/uploads/s ... /hs253.pdf

Then if they apply, or should apply based on future business, you will be eligible for Business Rates rather than Council Tax. Read all about Small Business rates relief here: https://www.gov.uk/apply-for-business-r ... f/overview

Some discussion on LMH here: viewtopic.php?t=16150

There are different rules in some places; I think Wales for example, but it's possible to have the relief based on future use of a property. I went on to business rates straight away with both my properties. It's best just to have a chat with the business rate section of your local Council, they're hopefully the best people to advise you.

[JohnDenise]

Thanks Nemo.

Looks like you dont need to actually have a business to qualify for the relief, for Tax purposes my holiday let would be treated as trade.

[SandyBeaches]

We have a bit of a situation going on with our local council here whereby they have imposed a development levy on local tourist businesses I think. The net result is that if you have a holiday cottage and you've registered for small business rate relief, then the levy virtually negates any advantage. It's a relatively new thing and we're in a big tourist area on the Norfolk Coast, so check if your local council has anything similar.

I haven't experienced it but my friend who has a couple of cottages is furious as she's got to pay it. As a net result she's only about £20 better off per annum, and you have to wonder if the hassle of all the form filling is worth it.

Of course councils differ and yours will be different.

[Guest]

[SandyBeaches]

That's really useful 7aspire - thank you. I will look into it a bit further. I think she gets small business relief on another business already (you can only have it on one business), so perhaps that's why she's not better off with the cottages.

[johnandtahra]

Is there a way to find out a typical rateable value? We have an indicative market rate for our place (for long-term letting) but nothing more.

Our plan was to start out with the place as a second home, as we're unlikely I think to have greater than 140 days let in 2015, but actually speaking to anyone in our local regional council is very difficult as it is a case of endless button pressing to navigate through the kind of menu system that reminds me of Colossal Cave ("You are in a maze of twisty little passages, all alike")....

I'll be following this thread with interest, as it might be that we switch over to business rates. Does anyone know how easy it would be to switch back to council tax if we subsequently decided that holiday letting wasn't for us?

[Nemo]

Does this help? http://www.2010.voa.gov.uk/rli/en/basic/find

The rateable value is set by the VOA rather than your council. If your intention is to let it as a holiday let and advertise it as such, then I'd probably go for business rates from the outset. There are rules in place that cover the first year if you don't achieve the FHL target. Lots of links out there and more threads in here if you go looking.

[Guest]

[Guest]

[Nemo]

Getting mixed up? Probably! Suffering the flu and 10 days into my second bout in the space of a month, I'm probably losing the plot. VOA is the place to start anyway and then deal with the business rate section of your Council. The two different sections (Council Tax versus Business Rates) don't tend to know much about the other section in my experience.

[barbersdrove]

Aspire, can you come and live with me please?

[Guest]

[anya752000]

I'm in Wales and we have different rules to England.

Here you need to pay council tax initially then you must have let the property for minimum of 70 nights before you can apply to go from council tax into business rates. You then need to be available for rent for 140 nights and actually let for 70 nights each year to stay in rates.

The forms were a pain in the *** to complete and it took months and months for my property to be rated. (I did eventually get a refund for the council tax paid since the day I became rateable).

I get small business relief so it was well worth doing.