Published: 24 March 2021
HMRC has announced that it will clampdown on holiday landlords, by requiring them to prove that they have made a genuine and realistic effort to rent out their property for at least 140 days per year. Their concern is that many are not making a true effort to do so, and that the properties are left empty: effectively being second homes.
The number of second homes registered as holiday lets has gone up by 27% to around 60,000 over the last three years.
This increase in numbers as well as claims for COVID income support: grants of up to £9,000 to compensate for lost income, will have heightened HMRC’s concern. In reality, if many of the second homes were not genuine holiday lets, then the owners would not have an income to be compensated for.
A benefit of a second property being treated as a holiday let is exemption from Council Tax, with owners paying business rates instead. However, business rates only have to be paid if the rateable value is more than £12,000… and according to HMRC 57,600 of the 60,000 registered in this way do have a rateable value of less than £12,000. That means that less than 5% pay business rates.
Full details of the measures will be published in the next few weeks. We will keep you updated when they come out.