Holiday homes hit by Tax
Date: December 2009
A proposed plan to increase the tax burden for owners of holiday homes could have negative financial effects on small to medium sized businesses.
The Federation of Small Businesses say’s that 52 per cent of people running a self-catering holiday business believe that they would have to reduce staff numbers or freeze future employment if the proposal goes through as it would affect their financial standing.
The Proposal
Holiday home landlords would be reclassified as a normal residential landlord instead of a trading business. This change will affect the current tax breaks on offer to the group, the landlords making the flats and houses available for rental for 20 weeks in the year and actual rents being paid for minimum ten weeks.
FSB national chairman John Wright said: "Taking away reasonable tax breaks from small firms that run self-catering holiday properties could have a devastating impact on the sector.
"Small firms know they are crucial to pulling the economy out of recession and on to the road to recovery, but they need the government to create a tax-friendly environment to do so."
This announcement comes alongside the announced plans to increase the business rates cap, potentially affecting many smaller retailers.