Just when you thought that your small private rental businesses were safe from more challenges, the Chancellor announced some tax changes, in the Spring Budget. This was mentioned very quickly, between the NHS and Energy announcements and with no particular details (see below). He did however illustrate he had support from named southern MPs with this change, which is surprising as these are all heavily dependent on tourism.
We were invited!
In a surprising turn of events, Steve, the Founder of My Getaways, was personally invited to witness the Prime Minister’s Question Time (PMQ’s) at the Houses of Parliament on Budget Day 2024.
This invitation comes amidst significant announcements made by the Chancellor regarding the short-term rental sector, specifically the abolishment of the Furnished Holiday Let (FHL) tax regime and capital allowances benefits. In this blog, we will delve into the implications of these changes and the potential opportunities they may present.
The Impact on the Short-Term Rental Sector:
The Chancellor’s decision to abolish the furnished holiday let tax regime has sent shockwaves through the UK short-term rental sector. This move, coupled with the government’s intention to increase taxes and regulate holiday let owners, has raised concerns among landlords. However, it is important to note that until the full details are released, there is still room for potential opportunities within this new framework and we are seeking guidance on behalf of our owners.
The detail so far
The governments spring budget is documented in pdf format here and 204 pages long: But we can save you time by directing you to pages: 7,8,85,98 and 164, which essentially says:
3.29 The government will remove the current incentive for landlords to offer short-term holiday
lets rather than longer-term homes by abolishing the Furnished Holiday Lettings (FHL) tax regime.
This will level the playing field between short- term and long-term lets and support people to live in
their local area. This will take effect from April 2025 and draft legislation will be published in due course.
This is a quote from the Guardian:
Hunt confirms plans to scrap the furnished holiday lets regime. The initiative gives tax reliefs on properties being rented out to holidaymakers and make renting out to holidaymakers more profitable than to long-term tenants. The move is expected to raise £300m a year for the Treasury.
PW: Another relatively minor tax change which taps into what appears to be genuine public sentiment – in this case, worries about how the rapid growth of the Airbnb economy risks hollowing out some holiday-dominated communities.
Expert Advice from My Getaways
In light of these changes, landlords in the short-term rental sector are in greater need of expert advice. My Getaways, being a renowned name in the industry, has positioned itself as a reliable source of guidance for navigating through the implications of the new announcement. With their extensive knowledge and experience, they can assist landlords in adapting to the evolving landscape and maximizing their potential within the sector.
Conclusion:
Steve’s invitation to witness PMQ’s at the Houses of Parliament on Budget Day 2024 highlights the significance of the Chancellor’s announcements regarding the short-term rental sector. While the abolishment of the furnished holiday let tax regime may initially seem like a blow, it is important to approach this development with an open mind, as it could also present unexpected opportunities. Landlords are advised to seek expert advice, such as that provided by My Getaways, to effectively navigate through these changes and make informed decisions for their businesses.