Business Rates on 2nd FHL

If you are planning to buy a rental home, or you're thinking about what to do with one you have just acquired, this is the place for any questions about starting out in the rentals business.
loveka
Posts: 88
Joined: Fri Aug 19, 2016 10:32 am

Business Rates on 2nd FHL

Post by loveka »

We pay business rates on our cottage, but have the relief so pay nothing.

We are thinking of buying another cottage. It is one building, but is split in 2. There is a 2 bedroom cottage and a one bedroom cottage. The current owner rents out the one bedroom, but we will rent out both. She pays separate council tax on the properties, even though it is one building with totally shared services.

We are worried about our liability for business rates, as I believe you can only get relief on one property. We are in Cornwall.

Any advice or knowledge would be great please! Thanks.
Jonathan
Posts: 122
Joined: Thu Aug 14, 2014 10:17 am
Location: Warwickshire
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Re: Business Rates on 2nd FHL

Post by Jonathan »

loveka wrote:We pay business rates on our cottage, but have the relief so pay nothing.

We are thinking of buying another cottage. It is one building, but is split in 2. There is a 2 bedroom cottage and a one bedroom cottage. The current owner rents out the one bedroom, but we will rent out both. She pays separate council tax on the properties, even though it is one building with totally shared services.

We are worried about our liability for business rates, as I believe you can only get relief on one property. We are in Cornwall.

Any advice or knowledge would be great please! Thanks.
We have two lets all part of the same building, including our house - it's a large mill. We get full business rate relief on the two lets. I think they look at the business rather than each property individually.

Jonathan (in Warwickshire)
ianh100
Posts: 598
Joined: Thu Jan 10, 2013 4:37 pm
Location: Sherborne Dorset

Post by ianh100 »

I have 2 properties that are attached but registered as separate properties. I pay rates on one and get 100% relief on the other.

This does depend on the value of the properties and we only just scraped under the value with this years changes.

It seems strange that your property is viewed as 2 if all services are shared. Could be worth talking with land registry. Do they have separate deeds?
newtimber
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Joined: Sat Nov 24, 2012 5:57 pm
Location: Brighton
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Post by newtimber »

ianh100 wrote: It seems strange that your property is viewed as 2 if all services are shared. Could be worth talking with land registry. Do they have separate deeds?
This is the dreaded staircase tax that has been in the news recently...
loveka
Posts: 88
Joined: Fri Aug 19, 2016 10:32 am

Post by loveka »

So it seems a bit inconsistent!

We will have 3 in total. The business rates, if we have to pay them, would wipe out our income from the 2 new lets. Business rates seem to be a lot more than council tax. For example, our cottage paid council tax which was £1400. When we went onto business rates it was £2800.
Giraffe
Posts: 410
Joined: Sun Jun 26, 2016 10:10 am
Location: Cornwall, England

Post by Giraffe »

loveka, suggest you look at the government website on business rates. Everything is clearly laid out. My interpretation is that you will only get small business rates relief on your main holiday let. If you then have more than one holiday let you need to be careful that you don't lose this first set of rates relief. To quote from the website-

" IF YOU USE MORE THAN ONE PROPERTY

When you get a second property you'll keep getting any existing relief on your main property for 12 months.

You can still get small business rates relief on your main property after this if both the following apply:

. None of your other properties has a rateable value above £2,899
. The total rateable value of all your properties is less than £20,000 (£28,000 in London) "

Hope this helps. By the way, you have no choice as to whether to pay council tax or business rates. If you make lets available (in England) for more than 140 days per year you are obliged to pay business rates.

As to whether your potential purchase is one or two properties will have been specified by your local council. Some take the view that if each let has its own entrance then they are separate properties. Have not heard of the staircase tax, interesting news newtimber.
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