Should I Stay Or Should I Go?
While the pandemic had many downsides, it did remind us of the beautiful holiday locations here in the UK and, while airports are busy again, it seems we are still finding the time for a staycation. According to a recent survey by Holiday Cottages, 61% of respondents said they were ‘more likely to go on a staycation than previously’ and 49% confirmed they’re ‘definitely intending’ to go on one in the next year.
Apparently, the types of staycation which are popular currently are ones where dogs can come too or where a group of people enjoy a break together under one roof – whether that’s a hen weekend or a multi-generational break, perhaps to celebrate an anniversary.
Here at Lewis & Co, we boast a number of clients who own holiday homes, which they let out. There are special tax rules for rental income from properties that quality as furnished holiday lettings (FHL) and we can support clients in that situation.
If you let properties that qualify as FHLs:
• You can claim Capital Gains Tax reliefs for traders (Business Asset Rollover Relief, relief for gifts of business assets and relief for loans to traders).
• You’re entitled to plant and machinery capital allowances for items such as furniture, equipment and fixtures.
• The profits count as earnings for pension purposes.
To benefit from these rules, you need to work out the profit or loss from your FHLs separately from any other rental business.
The property must be available for letting as furnished holiday accommodation letting for at least 210 days in the year; and it must be let commercially as furnished holiday accommodation to the public for at least 105 days in the year. Also, it cannot be let to the same person for more than 31 consecutive days.
If your holiday let meets the criteria to be a FHL, HMRC will potentially allow you additional tax benefits compared with traditional residential landlords. Again, we can talk you through these benefits, as well as VAT implications and what sort of business the holiday let should sit within – sole trader, limited company etc.
That said, international tourism is booming again and, according to Which, the best destinations to visit in 2025 include Nuuk in Greenland, Ghana, Singapore, Cape Town and Saudi Arabia.
We count several independent travel agents among our clients. While they are busy making sure their clients travel to some amazing destinations, we are there supporting them to keep their finances running smoothly. Again, our experience in this area means we are well positioned to advise clients who own this type of business.
Here in Kent and Sussex, good weather – and we’ve had lots of sunshine recently – always brings a boost for the hospitality sector. If you’re in the pub or restaurant trade, you’ll also need an accountant by your side who understands your business. At Lewis & Co, we’ve been working with hospitality businesses for nearly 40 years and we’d love to talk to you about how we can support you.
If you’ve got any questions at all, please do contact us on 01892 513515.