Ask the Experts...
Q. I currently pay council tax on my holiday cottage. Is this right?
A. The Helpful Holidays team say:
Paying council tax on your holiday cottage is correct if it’s just your second home and not rented out commercially. If you make it available for holiday lets for 20 weeks (140 days) or more, then it should be registered for business rates rather than council tax. The Valuations Office (VOA, Tel 03000 501501) sets the rateable value and business rates are charged accordingly. You can find details on their website, www.voa.gov.uk/corporate/Publications/holidaycotta... . Currently, if the rateable value of a property is less than £6,000, small business rate relief is 100% for many councils so it may benefit you to register the holiday cottage for business rates.
Similarly, Furnished Holiday Letting (FHL) tax relief is available on income generated by properties made available for 30 weeks and let for at least 15 of them. Basic guidance from HM Revenue and Customs can be found at www.hmrc.gov.uk/helpsheets/hs253.pdf.