Taking a holiday from business rates thanks to SBRR
Here’s a topical musing as we head towards the summer holidays which includes some good news for anyone who owns and rents out a seasonal holiday let.
Holiday home owners are enjoying a little ray of sunshine when it comes to business rates by taking advantage of the Government’s Small Business Rates Relief scheme.
Second home owners, who rent out their properties as holiday homes for 140 days in a year, qualify as a small business and, as such, are entitled to 100% relief on their business rates payable if their properties have an RV of less than £12,000.
Analysis of 7,300 holidays homes in Cornwall as a starter for 10 showed that 7,100 of those second home owners fell under the threshold and so pay nothing in business rates.
In that county alone it adds up to a saving of more than £13m pa so imagine if that is extrapolated out across the country and includes other holidays hot spots such as the Lake District, Devon and the Yorkshire Dales. Suddenly we are looking at significant sums of money.
Over the five-year rating list in Cornwall it equates to a £66m saving.
Any holiday owners who take advantage of the system are only doing what a sensible business owner should do to mitigate their tax liabilities, but it does seem unfair to have this windfall for second home owners when so many other bona fide SMEs are struggling.
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