The Valuation Office Agency (VOA) made changes to the eligibility rules for self-catering properties, which mean the property can be assessed for business rates.
In 2022 the UK and Welsh Governments announced changes to the eligibility rules for whether a property can be assessed as a self-catering property, and whether it be valued for Business Rates or Council Tax.
New eligibility rules came into force on 1 April 2023. For assessment purposes the VOA will look at the letting information of a property from the previous operating year. Owners of self-catering properties need to be aware that it is both the availability and the actual letting of their property that will determine whether they are eligible for Business Rates or Council Tax
The new eligibility rules
In England, your property must be (all of the following):
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available for letting commercially (with a view to making a profit) for short periods. These short periods must total 140 days or more in the previous, and in the current year.
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actually let commercially for 70 days or more in the previous 12 months.
The VOA started contacting customers from October 2022 to let them know about the new eligibility rules, with a mailshot to self-catering properties on the Rating List at that time.
From April 2023 the VOA started contacting owners on a rolling programme. This means they were asking for information throughout the 2023/24 financial year. However, the VOA will be using a universal date of 01 April 2023, from which they will assess whether the new eligibility rules have been met. This means you could have changes to your bill during the year and backdated to that date
If a property does not meet the new eligibility rules for the 2022/23 operating year, the property will be moved out of Business Rates and into the Council Tax Valuation list from 1 April 2023.
These rules will also apply equally to all new holiday lets. Please note you will be liable for Council Tax until the property meets the new eligibility rules, at which time the property will be moved to Business Rates.
There are a number of rate reliefs available to assist businesses, including Small Business Rate Relief. Please click the following link for further information on this.
For more information on Holiday Lets please see the following links:
https://www.gov.uk/government/news/changes-to-business-rates-rules-for-self-catering-properties
https://www.gov.uk/introduction-to-business-rates/self-catering-and-holiday-let-accommodation