Laura Sharman 05 August 2021

Councils missing out on £110m a year due to holiday home tax break

Councils missing out on £110m a year due to holiday home tax break image

Councils are missing out on £110m a year in council tax income due to a loophole in the business rates system, new research has shown.

Colliers warns property owners that rent their homes as holiday lets for 140 days of the year can elect to pay business rates rather than council tax. However, they can claim for relief of up to 100% depending on the rateable value.

Its research found there are over 73,000 holiday let properties across England and Wales that are eligible for 100% business rates relief, amounting to around £110m a year in lost council tax revenues.

Cornwall is the area most affected by this with 10,701 holiday let properties that do not pay either business rates or council tax, depriving the council of £18m extra income every year.

John Webber, head of business rates at Colliers, said: 'Given the pressure on local authority finances, we find it incongruous that this loop hole has not been closed and it is unfair that the local tax burden remains weighed onto local residents or other types of businesses that are struggling to pay their bills.

'We want to make it clear we don’t blame the homeowners that take advantage of this tax break through making their properties available to let- this could be considered sensible tax planning. However we do blame the Government for over-seeing this mess which inevitably leads to friction in many coastal resorts.'

SIGN UP
For your free daily news bulletin
Highways jobs

Social Worker – Children & Families Service, FAST

North Yorkshire County Council
£30,451 - £39,880 per annum
We are looking for experienced or newly qualified Social Workers to join our highly regarded and consistently... Northallerton, North Yorkshire
Recuriter: North Yorkshire County Council

Asset Management Engineer

North Yorkshire County Council
£24,982 to £35,745
We’re looking for an Asset Management Engineer to join our Highways Asset Management Team. Northallerton, North Yorkshire
Recuriter: North Yorkshire County Council

Transport Planning Officer

North Yorkshire County Council
£30,451 to £32,910
We’re looking for a Transport Planning Officer to join our Transport Planning team. Northallerton, North Yorkshire
Recuriter: North Yorkshire County Council

Highways Officer

North Yorkshire County Council
£27,741 to £30,451
Are you someone who is looking to progress their career with one of the most highly regarded highway services in the country? Boroughbridge, York
Recuriter: North Yorkshire County Council

Maintenance Manager

North Yorkshire County Council
£43,857 to £47,782
As Maintenance Manager you will lead the team to ensure our highway safety compliance for... Boroughbridge, York
Recuriter: North Yorkshire County Council

Public Property

Latest issue - Public Property News

This issue of Public Property examines how how flexible workspaces can lead the way in regeneration for local authorities, Why local authority intervention is key to successful urban regeneration schemes and if the Government’s challenge of embracing beauty is an opportunity for communities.

The March issue also takes a closer look at Blackburn with Darwen Council's first digital health hub to help people gain control over health and care services.

Register for your free digital issue