Some holiday lets owners are ‘gaming’ the system to claim business rate relief, comments made by the Housing Minister Lord Greenhalgh suggest, who has promised action to clamp down on the practice.

In a Lords’ debate on second homes, peers voiced concerns that second homeowners were advertising properties as holiday rentals and avoiding council tax by registering for business rates, thereby qualifying for small business rate relief.

Shadow housing spokesperson Lord Kennedy of Southwark said this meant owners can pay very little tax and suggested a larger levy to encourage landlords to rent to tenants instead.

Lord Greenhalgh (main pic) said it was approaching this issue by, “ensuring that people do not game the system”.


He added: “The government will legislate to require that holiday rentals meet an actual letting threshold before being assessed for business rates. This will ensure that only genuine holiday businesses can access the rate relief for small businesses. We have not yet finalised what that threshold will be.”

Under the current rules on holiday lets for business rates, a property in England is rated as self-catering and valued for business rates if it’s available to let for short periods of 140 days or more each year.

If a property’s rateable value is less than £15,000, owners may be eligible for small business rate relief. The minister also confirmed that he is still considering a registration system for holiday lets.

short lets

The Short Term Accommodation Association believes the business rates rules for holiday lets in England should apply at the threshold of 140 nights let. “We think this would result in more tax being collected across the UK, since increasing the threshold would mean fewer operators qualifying for small business rates relief than would be the case under a 70-night threshold,” says chair Merilee Karr (pictured).

She adds: “Only genuine, year-round businesses should be paying business rates and everyone else should be contributing to their local community via council tax.”

Read more about the holiday lets sector.


  1. Govt will be looking to penalise FHL as these prevent normal lettings.

    Govt doesn’t want FHL.

    It will seek to tax FHL out of existence like S24 for mortgaged sole trader LL.

    This will finally force LL to sell up.

    There will be no avenues for LL to turn to.

    Selling up will then be the most effective option.

    There is no doubt about it that Govt wishes to restrict 2nd homeownership of all types.

    Being leveraged gives Govt opportunity to tax the LL out of existence with S24 type policies.

    Don’t think for one moment that Govt will continue to allow small corporate LL to avoid S24 style taxes.

    Govt intends to tax leverage of all types to prevent 2nd home ownership.

  2. Landlords are “gaming the system”.

    Not at all like the multi-millionaires who have been “gaming the system” for years and nothing is ever done.

    We already have a system whereby Holiday Let Landlords must keep records to show HMRC that the property is indeed a FHL.

    Just because HMRC is inept at checking those figures, does not mean all FHL landlords are “gaming the system”.

    Use the current rules to stop those who are breaking them !!!


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