Business Rates on Self Catering Holiday Accommodation

Business rates are payable on various types of self catering holiday accommodation including single holiday cottages, flats or chalets and complexes of accommodation. These properties are treated as non domestic and rateable if the property is self contained; self catering; let for short periods; let commercially and available to let (as opposed to actually let) for 140 or more days per year. A property available to let for less than 140 days is classed as domestic and Council Tax would be payable.

The rateable value is set by the Valuation Office Agency and is broadly based on the annual rent the property could be let for in the open market, on a particular date, on full repairing and insuring terms. In the case of self catering accommodation it is based on the rent that an operator or tenant would pay to a landlord or owner of a property to then let the accommodation as holiday letting accommodation.

There is limited evidence of properties let for this purpose so the Valuation Office Agency also takes into account general trading information and from that adopts a rate per single bed space for individual properties eg. a cottage with 3 double bedrooms would count as 6 single bed spaces. It is important to note that the rent an operator might pay to run a property for self catering holiday accommodation given the profits after deducting overheads from rental income will, in many cases, bear little or no relation to capital value or indeed rental value for full time letting.

The rate per single bed space will vary between properties depending upon size, location and other physical factors. Forms of Return requesting trading information and details of any rents paid are currently being sent out for the 2017 revaluation. The VOA will formulate bed space rates based on this information.

Currently, properties with a rateable value of less than £6,000 benefit from 100% small business relief but there is no knowing how long this benefit will last. Early and coordinated appeals in the 2017 valuation will ensure future rates liabilities are kept to a minimum.

Duncan Young
Mere Commercial Limited