Labour has been warned of the consequences of its latest tax raid. (Image: Getty)
has been accused of threatening the great British holiday with its latest tax raid, this time targeting small businesses in the tourism industry. The Government will scrap the current furnished holiday let (FHL) tax regime on April 5, ending a 40-year scheme that has helped .
Ben Spier, head of regulation and policy at , warned some FHL owners will have to sell their properties, potentially skyrocketing the price of the remaining lets. He told the Express: “Removing holiday lets, harming the staycation boom, reducing the opportunity for people to holiday in the UK because prices will go up – .” FHLs must be available to let for at least 210 days in the tax year and actually let for at least 105 days. The total length of long-term bookings – over 31 days – must not exceed 155 days of the year.
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Alistair Handyside owns four FHLs. (Image: Handout)
The current tax breaks, which have been in place since 1984, allow owners to claim capital allowance and various capital gains reliefs, as well as class income from the properties as
This will all come to an end in less than a month, when FHLs will be classed as normal property lets, thereby disqualifying them from any special tax treatment.
Alistair Handyside, owner of four FHLs, echoed Ben’s concern for holidays in Britain and warned of the that rely on tourists.
He told the Express: “If you damage that, then people can’t find somewhere to stay, then the pubs go, the visitor attractions go.”
Alistair, also the executive chair of , the UK’s largest association representing the holiday lets sector, campaigned tirelessly to the Treasury, trying to warn against making “the wrong call” that would impact the businesses they should be supporting.
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Experts have warned against scrapping the current FHL tax regime. (Image: Getty)
He said scrapping the current tax regime “is not going to make enough difference to justify the ” where FHLs are sometimes the only options for visitors.
PASC also identified nine “serious financial impacts” self-catering businesses face under the Labour Government, including council tax premiums and the National Insurance increase.
In November, ministers declared an ambitious target of raising the UK’s visitor numbers to 50 million a year by 2030, but the likelihood of this being achieved has been described as dim.
Ben, who spent a decade advising ministers and drafting legislation in the Government’s legal department, slammed the tax regime abolition as if the 50 million pledge is to be met.
He said: “These micro businesses are battling to keep UK families holidaying here and to spend their money here. The Government isn’t helping them, and yet the want 50 million inbound visitors by 2030. It’s not growth, is it? It’s not the growth agenda.”
One such area that may find itself particularly affected by the tax regime change is North Norfolk, which said had the highest number of holiday homes in the country. The 2,195 properties represent 3.9% of the total residences.
Leader of North Norfolk Council, Tim Adams of the Liberal Democrats, said Labour were making the wrong decision, one that “will impact on the retirement plans and investments of numerous people who have bought these properties”, he told the Express.
A Treasury spokesperson said: “The furnished holiday lets tax regime disadvantages landlords who provide homes to longer-term residents.
“By equalising how income and gains are taxed by landlords providing short-term and long-term lets, we are levelling the playing field and supporting public services and investment projects with around £190m by 2029-30.”