We’re All Going On A Summer Holiday

According to the UN Tourism Organisation (UNWTO), international tourism is well on track to return to pre-pandemic levels, with figures at the end of 2023 at 88% of 2019. Last year, the Middle East – which includes the ever-popular destination of Dubai – led the recovery, as the only region to overcome pre-pandemic levels, with arrivals 22% above those of 2019.

According to Lonely Planet, countries which should be on our radar this year are Mongolia, India, St Lucia, Mexico, Morocco, Benin, Uzbekistan, Pakistan and Croatia.

Here at Lewis & Co, we can count several independent travel agents among our clients and it’s good to see those businesses doing well, after a few difficult years. 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.

The pandemic did introduce us to some lovely parts of our own country and we also have 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.

Here in Kent and Sussex, good weather 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, then please do contact us on 01892 513515 or info@lewisandco.biz