Katie Warren’s 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

It was announced as part of the Spring Budget measures that the present favourable tax benefits presently allowed for the letting of properties as short-term holiday lets - known as the furnished holiday lettings (FHL) tax regime - is to be abolished from April 2025. The Labour government has confirmed that these changes will take effect as planned. HMRC has now published a policy paper providing further details of how these changes will work in practice. The policy paper states that the changes will remove the tax advantages that current furnished holiday let landlords have received over other property businesses in four 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; and no longer including this income within relevant UK earnings when calculating maximum pension relief. After repeal, former FHL properties will form part of the person’s UK or overseas property business and be subject to the same rules as non-furnished holiday let property businesses. There is also an anti-forestalling rule that prevents the obtaining of a tax advantage through the use of unconditional contracts to obtain capital gains relief under the current FHL rules. This rule applies from 6 March 2024. The loss of the special tax regime for holiday lets is expected to have a significant effect on many of those involved with the short-term holiday rental business in the UK.

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

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

Council Tax rates due to rise by 5% in England and Wales 🏘 According to reports, another blow to households as Council Tax bills are set to increase by an average of 5%. The increase will increase our average council tax bill yearly by just over £100 in an already tough economy for many families. The increase is planned by most local authorities in England as the majority are planning to increase by 5%. Councils in Wales are also proposing an increase of between 5% and as much as 10% in some areas, however, Scotland has already committed to freeze rates. Read more: https://lnkd.in/eNxs2Bm4 #CouncilTax #localauthorities #localauthority #council #moneytips #moneymatters #moneysavingtips #money #costofliving #financialeducation

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

Victorian State Budget Victoria has released its 24/25 State Budget and unlike last year, there appears to be some reprieve from increases for Victorian tax payers. However, as announced in last year's budget, there are still increases on there way with some commencing from 1 July this year https://lnkd.in/gMQPHUvG

The Government has changed their approach. The current tax year will not be affected, meaning : Residential rental properties acquired prior to 27 March 2021 that are NOT new build will have 50% deductibility for the tax year ended 31 March 2024; and Residential rental properties acquired on or after 27 March 2021 that are NOT new build will have no interest deductibility for the tax year ended 31 March 2024. The proposed change will allow for 80% interest deductibility for residential rental properties not deemed new build for the tax year ending 31 March 2025, then 100% in the following tax year. This detail is not yet legislation so should not yet be relied upon and we advise discussing with us prior to making an informed decision regarding it.

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/enBNSmF8

With the cost of living crisis, housing supply issues, stage three tax changes, and negative gearing in the news, this article is very timely. I have posted before that governments need to review the tax system as a whole and not just make small changes that are only focused on popular issues or governments wanting to get re-elected for another term. This article highlights the review that Ken Henry did is very relevant today as it was back 15 years ago. Reviewing our tax system will also make Australia competitive with other countries and support long-term growth. What do you think? https://lnkd.in/g6aGn86w