White logo - Duncan & Toplis

HMRC set to crack down on second homes classified as Furnished Holiday Lets

| Duncan & Toplis | 14 April 2021

The Treasury have announced that they intend to crack down on taxpayers claiming that their properties qualify as Furnished Holiday Lets, where in fact the qualifying conditions are not being met. 

Furnished Holiday Lets are exempt from paying council tax and instead pay business rates, as well as attracting a number of generous tax reliefs, such as the ability to claim capital allowances and taxing gains on sale at a rate of only 10%. 

However, HM Revenue & Customs believe that some taxpayers may be incorrectly claiming Furnished Holiday Let treatment even though they have not let the property out to tenants. 

A property must meet the following conditions during a tax year in order for a claim to be made for it to be classed as a Furnished Holiday Let: 

  • The property must be furnished and situated in the UK or any other state in the European Economic Area. 

  • The property must be available for commercial letting for at least 210 days of the relevant tax year. 

  • Finally, the property must actually be let out for at least 105 days in the tax year and the property must not be occupied by the same tenant for a continuous period of more than 31 days at a time (so long term furnished lets will not qualify). 

If you have concerns about your own Furnished Holiday Let, then please contact our team.


Share on LinkedIn Share on Facebook Share on X Share via Email