The Professional Association of Self-Caterers (PASC), the Short-Term Accommodation Association (STAA), and the Association of Scotland’s Self-Caterers (ASSC) are continuing to lobby the UK government in relation to the proposed abolishment of the furnished holiday lettings (FHL) tax regime.
The key proposed changes include:
Relief for finance costs on FHLs (interest on loans and mortgages) being restricted to basic rate (20%) tax deduction only.
Capital allowances will no longer be available.
Capital gains tax reliefs will be removed.
FHL income will no longer be classed as relevant earnings when calculating pension tax relief.
It is proposed the new changes will take effect from April 2025 (tax year 2025/26).
PASC Chair, Alistair Handyside, has asked the government to pause implementation in order to help operators prepare for the changes.
“The process is simply too fast – not giving owners time to plan accordingly. Pushing for a delay in implementation will be a key thread of our work. We pointed out [when meeting Treasury officials] that no-one has done anything illegal – they signed up to an official FHL tax regime, created by HMRC – and are not being given enough time or transitional support to move to another tax regime without facing considerable financial harm.”
PASC data suggests about 20% of operators will quit the industry if the plans are introduced without amendment – which might have a devastating impact on coastal and rural economies already stretched by the cost-of-living crisis.
Mr Handyside added: “The most important thing that everyone can do this is to take part in our petition. We have just passed 5,000 respondents. It is vital as many people do this as possible. The petition forms the basis of so much of the work we can do to push back against FHL abolition.”
Click here to take part in the PASC petition – which will automatically email a letter to your local Member of Parliament (MP).
Meanwhile, STAA has also provided an update on its lobbying efforts. STAA CEO, Andrew Fenner, was joined by representatives from Sykes Cottages and Travel Chapter at a recent meeting with Treasury officials.
A STAA spokesperson said: “Our focus in this process is clear: to protect the livelihoods of our members and ensure that the Treasury understands the real impact these changes will have on the sector. We’re not just pushing back; we’re presenting solutions that will allow our industry to continue to contribute significantly to the UK’s economy. As always, we work diligently behind the scenes to defend our industry and help our members' businesses thrive.”
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