If you let out a self-catering holiday home in England or Wales and claim it as a business, you’ll need to be aware of and comply with new rules that are coming into effect next year otherwise you could face unexpected Council Tax bills.
From 1st April 2023 the business rates rule for self-catering properties is being updated, meaning that many people who claim their second home as a business will no longer be eligible for Council Tax relief. Read on to find out more about the new rules, along with some top tips on how you can fill your holiday let spaces and therefore better ensure you meet the new criteria.
What are the new business rate rules for self-catering properties?
This depends on whether your holiday let is in England or Wales – each country has its own eligibility rules. We’ve outlined HMRC’s criteria for both countries in the table below.
If your property is in England, it must be:
If your property is in Wales, it must be:
|· available for letting commercially for short periods that total 140 days or more in the previous and current year.
· actually let commercially for 70 days or more in the previous 12 months.
|· available to let commercially for short periods that total 252 days or more in the previous and current year.
· actually let commercially for 182 days or more in the previous 12 months.
These new rules will come into effect from the beginning of April. Eligibility will be decided based on lettings information from the 2022/2023 operating year. You’ll be asked to complete a ‘Requests for Information’ form to help valuation officers decide whether you are eligible or not. Financial penalties will occur if this form isn’t submitted on time – so be sure to complete it efficiently and accurately!
If you’d like to find out more about these changes, please visit the Government’s news story.
How can I increase my holiday let bookings to ensure I meet these new rules?
Every holiday let is unique so obviously there isn’t a one-size-fits-all approach when it comes to increasing your bookings, but here are a couple of suggestions that you may wish to mull over:
1. Consider accepting pets
You’ll no doubt have your reasons for not wanting any pets in your property, but it’s definitely worth considering if it’s feasible. It’s a known fact that accepting pets is one of the best ways to boost your bookings – taking pets on holiday is a vital aspect for many pet owners. It opens your property up to a whole new target audience, giving you more opportunity for bookings – many of which are likely to be out of season too.
2. Invest in professional photography
When you’re searching for accommodation for yourself, what’s the first thing you look at? Imagery! That’s why it’s so important to make sure that the photos of your property are of a high standard and accurately reflect the style and quality. A professional photographer will know all the tricks-of-the-trade in terms of using props and lighting to ensure your property is portrayed to its best potential.
3. Develop a brand and market yourself
Marketing doesn’t have to be expensive; there are lots of ways you can promote your property without spending much at all. Taking the time to develop a brand will help make your business feel more trustworthy. You can then market yourself across various social media platforms or have a go at email marketing! This is a great way to share your knowledge not only of the property but of the local area, attractions, walks, great places to eat etc.
4. Set up a blog
Blogging is the ultimate way to drive more traffic to your website, and it’s relatively easy and cheap to do. It’s another great way of sharing your knowledge about the local area, boosts your credibility and gets potential holidaymakers excited about their trip!
5. Reward returning holidaymakers
Rewarding loyalty encourages and entices previous holidaymakers back to your property, rather than going elsewhere. It makes customers feel valued and appreciated, and you’ll be remembered for doing so! Don’t forget to ask them to leave reviews on your social media platforms too as this will again help to boost your brand’s credibility.
If you’d like to learn more about marketing your property, take a look at Schofields Insurance’s comprehensive guide. It goes into lots of detail about how to best set up your property and covers everything you could possibly need to consider! Alternatively, if you’d like further advice about the business rates update, please don’t hesitate to contact our team of accountants.