A loophole that could be costing English local authorities millions in lost council tax is to be reviewed by ministers.

More than 45,000 holiday lets in England qualify for small business rate relief, but currently there is no requirement for evidence to be produced that a property has actually been commercially let.

Local government minister Rishi Sunak said Whitehall was aware that current arrangements did not provide ‘strong enough protections against abuse’.

He added: ‘We are seeking views on whether we should strengthen the checks already in place to ensure second-home owners have to pay council tax while ensuring genuine holiday let businesses are able to demonstrate they are eligible for business rates relief.’