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Changes to business rates rules for self-catering properties…

PUBLISHED ON: 04/11/2022

The government has established new rules for business rates that will take effect in England and Wales from April 2023.

In January 2022, the government published the consultation outcome following a review of business rates for self-catering properties.

The current rules mandate that second homeowners, including those who are permitted to rent out their properties for brief periods of time, pay council tax.

However, if a property is available for short-term, commercial let as a self-catering property (like holiday rentals) with the goal of turning a profit. These short periods must have a cumulative length of 140 days or more to be considered for business rates.

Concerns about the current rules, which would permit some second homeowners to register for business rates without intending to lease the property, prompted the review.

The government responded to the review by announcing that the eligibility requirements for business rates would be strengthened, with new rules taking effect on 1st April 2023.

During the operation year 2022–2023, the Valuation Office Agency (VOA) will carry out compliance checks to examine a property’s letting arrangements in order to determine if the new rules are adhered to.

A property will be transferred from the business rates list to the council tax value list if it does not comply with these new rules.

The new rules

The new rules vary depending on whether a property is in England or Wales.

From 1 April 2023, a self-catering property in England will be considered eligible for business rates if:

In Wales, a property must be:

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