Martin Ford 09 August 2021

Tax ‘loophole’ costs councils £110m

Tax ‘loophole’ costs councils £110m image

New research suggests business rates relief for holiday lets is currently worth £110m a year.

Property agents Colliers has argued the tax exemptions for holiday homes are ‘unfair’.

Owners can class a property as a holiday let if it is available to rent for 140 days, meaning it will become liable for business rates instead of council tax.

As small businesses, they can then claim 100% rates relief.

Colliers has calculated there are 73,000 holiday let properties in England and Wales eligible for the discount and would pay £110m if they were liable for council tax.

In Cornwall alone, there are 10,701 holiday let properties that do not pay either business rates or council tax, which would be worth an extra £18m to the local authority.

Colliers’ head of business rates John Webber said ‘Given the pressure on local authority finances, we find it incongruous that this loophole 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.’

In Scotland, Edinburgh City Council is currently consulting on plans for tighter planning controls on short-term lets.

If approved and rubber-stamped by the Scottish Government, the whole city would be designated as a short term let (STL) control area, meaning they would require change of use planning permission unless they have been operating for more than 10 years.

The Scottish Government is also currently consulting on legislation to introduce licensing requirements for short-term lets next year.

Vice-Convener of the council’s planning committee, Maureen Child, said: ‘It’s great to see so much progress being made to tackle this issue we have campaigned so hard to address.

‘This is so important as STLs have reduced the city’s housing stock, hollowed out communities and caused numerous issues for residents such as noise and other anti-social behaviour.

‘I look forward to seeing these new powers being used to improve the lives of many of our residents throughout the city.’

For your free daily news bulletin
Highways jobs

Programme and Project Officer - Domestic Abuse

Cumbria County Council
£28,226 - £29,174
Are you looking to gain experience in a challenging, and incredibly rewarding environment? Carlisle, Cumbria
Recuriter: Cumbria County Council

Team Leader - Data Management

London Borough of Richmond upon Thames and London Borough of Wandsworth
£34,131 to £41,361
We are looking for a highly motivated and enthusiastic individual to join our Pensions Shared Service. Wandsworth, London (Greater)
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth

Street Lighting Operative

Cumbria County Council
£22,571 – £23,484
We are looking for the right candidate to join our team as a Street Lighting Operative. Cumbria
Recuriter: Cumbria County Council

Senior Lead Property Maintenance

Sandwell Metropolitan Borough Council
£42,614 - £47,665
Sandwell Metropolitan Borough Council’s Urban Design & Building Services team is looking to employ a permanent Senior Lead (Property Maintenance) Sandwell, West Midlands
Recuriter: Sandwell Metropolitan Borough Council

Trainee Community Support Worker - Customer Service Centre

Leicestershire County Council
An exciting opportunity has arisen for a Trainee Community Support Worker to work within our Customer Service Centre. Leicestershire
Recuriter: Leicestershire County Council

Partner Content

Circular highways is a necessity not an aspiration – and it’s within our grasp

Shell is helping power the journey towards a circular paving industry with Shell Bitumen LT R, a new product for roads that uses plastics destined for landfill as part of the additives to make the bitumen.

Support from Effective Energy Group for Local Authorities to Deliver £430m Sustainable Warmth Funded Energy Efficiency Projects

Effective Energy Group is now offering its support to the 40 Local Authorities who have received a share of the £430m to deliver their projects on the ground by surveying properties and installing measures.

Pay.UK – the next step in Bacs’ evolution

Dougie Belmore explains how one of the main interfaces between you and Bacs is about to change.