Bytheway & Co Accountants and Business Advisors’ Post

Late Saturday 2nd March, the Government slipped out a Budget pre-announcement that the Chancellor would launch a £300 million tax raid on the holiday lets sector. Some sources suggested £500 million. We think that this likely to be an abolition of the FHL Furnished Holiday Lettings Allowances, which was muted by the OTS (Office of Tax Simplification) in November 2022. See report link below. It might be something else but we think that this is the most likely. We are seeing a veritable tsunami of legislation, taxation and regulation bearing down on the sector at the moment, and all before a Statutory Register is in place to provide real, not emotive data. We will respond in full when we have more detail, but if we are right and it is the abolition of FHL Rules, then it will damage the sector and time will show that it will not bring in anything like the Chancellors expectations in monetary terms. This and the planning interventions, launched before really good data is available, will shrink the sector, and that will have repercussions for local rural and coastal economies as well as businesses like pubs, restaurants, cafes and visitor attractions that the sector supports, in that fragile eco-system, the visitor economy. To follow this in detail, sign up for a our free weekly newsletter simply by sending an email to chair@pascuk.co.uk and putting Newsletter in the Subject line. https://lnkd.in/eGWXe_a6

Here we go…. So along with the second council taxation, the additional fire risk guidance, the planning permission Gove announced, potential registers and licenses, we now have this…. We already saw how many long term rentals disappeared when the section 24 took away mortgage interest from tax allowance, if they remove FHL allowance more properties will just be listed for sale and investors will just move money elsewhere… #holidayhomes #cornwall #property #FHL

The UK Government has confirmed plans to abolish the furnished holiday lettings (FHL) tax regime from April 2025 – but what does that mean for Capital Allowances claims? In our latest article, we explain how the changes will affect holiday let businesses. 🏡 #CapitalAllowances #BusinessNews #UKTravel #UKTourism

AXE FALLS ON TAX BENEFITS FOR FURNISHED HOLIDAY LETS The Government has published a policy paper confirming the abolition of the Furnished Holiday Lettings (FHL) tax regime. It will mean that property investors will no longer get the existing tax benefits of FHLs from next April. The previous Conservative government had unveiled plans to scrap it in the Spring Budget to help free up property stock and fund the National Insurance cuts. Published on 29 July, the documents set out confirmation of the move that was introduced in the Spring Budget in March under Rishi Sunak's premiership. The new Labour government has rubber stamped the move after it failed to get through parliament in time ahead of the general election. What does it mean? There are four principal elements of the policy, according to HMRC's statement, which read: "This change will remove the tax advantages that current furnished holiday let landlords have received over other property businesses in 4 key areas by: - applying the finance cost restriction rules so that loan interest will be restricted to basic rate for Income Tax - removing capital allowances rules for new expenditure and allowing replacement of domestic items relief - withdrawing access to reliefs from taxes on chargeable gains for trading business assets - no longer including this income within relevant UK earnings when calculating maximum pension relief "The measure promotes fairness and aligns the tax rules for furnished holiday lettings with those for other property businesses." Among those affected will be individuals, corporates, and trusts who operate or sell FHL accommodation. The key dates are as follows, with the new rules taking effect: - on or after 6 April 2025 for Income Tax and for Capital Gains Tax - from 1 April 2025 for Corporation Tax and for Corporation Tax on chargeable gains A new anti-forestalling rule has already applied from 6 March 2024. The aim is to "prevent the obtaining of a tax advantage through the use of unconditional contracts to obtain capital gains relief under the current FHL rules," HMRC stated. #TaxReform2024 #HolidayLetTaxChanges #FHLTaxAbolition #PropertyTaxUpdate #FurnishedHolidayLettings #RentalPropertyRules #LandlordTaxation #PropertyInvestors #Budget2024 #UKTaxPolicy #HMRCUpdates #PropertyInvestment

The election results. What will be the effect on your tax bill? The Labour party won the country’s mandate to form a new parliament. What could that mean for the tax you pay? Will there be an emergency budget? Labour will likely set out their initial plans in an ‘emergency’ budget. This is unlikely to happen before September or October as the Office of Budget Responsibility (OBR) will need 10 weeks to prepare independent forecasts on the plans. Further details will no doubt emerge over coming weeks, but here’s a review of what looks likely in the main tax areas based on their manifesto. Income tax changes • No increase to income tax rates. • Pension reforms are planned. •No mention has been made about the tax-free allowance. National Insurance Contributions (NIC) • A promise has been made not to increase employees’ NIC. Business tax • A roadmap for business taxation will be published in coming weeks. • Full expensing and the Annual Investment Allowance will be kept. Some further details to come that should clarify the qualification criteria. Corporation tax • Corporation tax to be capped at the current main rate of 25% (paid by companies with profits of £250,000 and over) for the whole of the next parliament. This may hint that there are increases to come for companies benefiting from the small profits rate or marginal relief. VAT • No increase to the VAT rate. • VAT will be applied to private school fees. Capital Gains Tax (CGT) • Nothing has been specifically mentioned on CGT rates or reliefs. • The ‘carried interest tax loophole’ will be closed. This mainly affects private equity executives who receive a stake in the funds they manage rather than traditional remuneration. Inheritance tax • No expected changes to current rates or reliefs. • The use of offshore trusts to avoid inheritance tax will be ended. Stamp duty land tax • The existing surcharge on purchases of residential property by non-UK residents will increase from 2% to 3%. • Perhaps this hints that further down the line there will be increases for UK residents too.

As you may have seen, the most recent budget is abolishing the FHL/SA regime from April 2025 onwards. This makes it more crucial than ever to make sure we are able to unlock CA tax savings for clients in a timely manner. We are waiting on legislation from the government to confirm what this means for claiming Capital Allowances past this date, but for now there is still an opportunity for you to unlock tax relief at your properties. https://lnkd.in/e86r9Ub9 #holidaylets #capitalallowances

If you're concerned about a potential rise in council tax and would like a helpful tool that will help you budget for your household bills and expenditure, you can use this interactive calculator to see the projected council tax rise in your area from 1 April 2024. #taxrises #counciltax https://lnkd.in/eJyetiwa

🏠 Draft legislation and associated guidance has now been published on tax changes affecting the owners of furnished holiday let accommodation. From 5 April 2025 a number of elements will be withdrawn, including Capital Allowances on the acquisition of qualifying plant, fixtures and fittings, and integral features. Click below to explore all elements being withdrawn and what they mean in practical terms 👇 https://lnkd.in/eB52QggS #HolidayLets #Tax

https://lnkd.in/g-ExiAr3 Get ready for the May 30th Government budget by reading what's already happening in the New Zealand tax space

What the 2025 Tax Reform Means for Holiday Let Owners: Preferential tax rules for furnished holiday lettings (FHLs) end in April 2025, removing any tax incentive to offer short-term holiday lets, rather than letting residential property on a longer basis.