Self-catering holiday accommodation that is available to let on a commercial basis for short periods may be subject to payment of Business Rates rather than Council Tax.
This type of property will have a commercial rateable value applied to it, instead of a domestic Council Tax band. The amount of rates you will have to pay is calculated by multiplying the rateable value by the annual rate in the pound.
The rateable value is set by the Valuation Office Agency (VOA), who will work out the Rateable Value of your property based on its type, size, location, quality and how much income you’re likely to make from letting it. You may be eligible to apply for Small Business Rate Relief for your Self-Catering Holiday Accommodation if you only let one property and its rateable value is less than £15,000.
Changes from 1 April 2023
From 1 April 2023 the VOA will review letting information from the previous operating year, by asking property owners to submit a Form of Return. Owners should be aware that it is the availability and actual letting of their property during the previous year that will determine whether they should be rated for Business Rates or Council Tax.
To qualify for Business Rates, in the previous 12 months the property must have been Commercially let, as self-catering accommodation, for short periods:
- Available for letting for at least 140 days and
- Actually let for 70 days or more.
All new self-catering accommodation must initially be entered into the Council Tax list, for at least the first 140 days. Only when all the eligibility rules have been met can the property be deleted from the Council Tax list and entered into Non-Domestic Rating.
If you own a property which is due to be made available to let for the first time as Self-Catering Holiday Accommodation, and for which you have never paid Council Tax or Business Rates (a new-build conversion for instance), then please contact our Council Tax department at email@example.com in the first instance.
Alternatively, if you own a property for which you currently pay Council Tax, but have commenced commercial letting as holiday accommodation, you should complete the VOA's online Form of Return on the GOV.UK website. This is in order for them to determine whether the property should be rated for Business Rates. However, if the property does not meet the criteria, it will remain in Council Tax.
If you own a property for which you are currently paying Business Rates, but the property is now being used as a domestic residence, you will need to register with the VOA for a Check / Challenge in order for them to move the property from Business Rates to Council Tax - Check and challenge your business rates valuation: step by step - GOV.UK (www.gov.uk).
Find out more on Business rates: Self-catering and holiday let accommodation (GOV.UK).