Chancellor mulls ANOTHER raid on holidays as 'Airbnb lets could be treated as second homes instead of businesses'
- See more Daily Mail on Google - save us as a Preferred Source
By JAMES TAPSFIELD, UK POLITICAL EDITOR
Published: | Updated:
Labour could launch another raid on Brits' holidays by taxing short-term lets as second homes.
Properties routinely rented out on platforms such as Airbnb can currently pay business rates instead of council tax in England.
They have to meet thresholds including being available to let for at least 140 days a year - and actually let for at least 70.
But the Government has confirmed it is considering 'concerns' that the rates relief available for small businesses is being used to 'manage tax liabilities'.
One change being mooted is subjecting all self-catered accommodation to council tax.
But there are warnings that would add thousands of pounds of costs to many owners - which could force them to sell up or increase prices for holiday-makers.
The potential move has been highlighted after the Government announced details of its 'tourist tax', allowing local mayors to impose percentage charges on overnight stays.
The Government has confirmed it is considering 'concerns' that the rates relief available for small businesses is being used to 'manage tax liabilities' on short-term lets. Pictured, Chancellor John Healey and Andy Burnham
Holiday lets in areas such as Cornwall could be affected by the crackdown
In response to a Commons written question, Treasury minister James Murray said the Government backed 'positive investment that supports local economies and genuine small businesses'.
But he added: 'Concerns have been raised about Small Business Rates Relief being used by second homeowners whose main aim is not to operate a local business but to manage tax liabilities.'
Mr Murray said ministers were seeking 'stakeholder input on the tax treatment of short-term lets, such as self-catering accommodation' and would make announcements 'in due course'.
Shadow chief secretary Richard Fuller said Labour was 'looking for ways to pull more and more people into scope for its crippling taxes including with a holiday cottage tax'.
Alistair Handyside, chairman of the Professional Association of Self-Caterers, told the Telegraph an average holiday-let owner could face up to £3,000 in extra annual costs.
He said: 'The average self-catering business owns 1.2 properties and it is usually a second income, often run by working mothers or retired people... I can tell you that the Government already takes more money out of my business every year than my wife and I do.
'What the Government doesn't realise is that holiday lets provide the bed space for people visiting areas that don't have the hotel spaces that London and big cities have. If the bed spaces decline, so does the local economy.'
Business rates are paid based on the 'rateable value' of a property - the market rent it would attract.
In response to a Commons written question, Treasury minister James Murray said the Government backed 'positive investment that supports local economies and genuine small businesses'
There are no charges if the rateable value is £12,000 or less and it is the only property a business uses.
Relief tapers off for rateable values between £12,001 and £15,000.
A Treasury spokesman said: 'The Chancellor is fully focused on his priorities, to give families and businesses a bit of breathing space, back British jobs, and drive growth in every postcode, underpinned by a commitment to meet the fiscal rules.
'As has always been the case, decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.'
KioskNews shows a cleaned-up reading view extracted from the publisher’s page — the original always lives on their site, not ours.