Should I Pay Business Rates On My Holiday Cottage?

Local authorities from different parts of the country have been approaching our policyholders to see if they should be charged business rates, rather than private council tax, on their holiday cottage.

Basically, holiday cottages and self catering units that are used for commercial purposes may be charged business rates if they are available for letting for 140 days or more in a financial year.

However, your property can be available for letting throughout the year, and providing you make a concious decision to only accept bookings for a total of 139 days (or less) then you will be rated for council tax.

Should you fail to make a concious decision to restrict the period for which bookings will be accepted, the property will be liable for business rates - even if the actual lettings fail to exceed the 139 day limit.If business rates apply, they can be charged from the date the property first became available for use as a self catering unit. For more information, and to find out how business rates are calculated, the Valuation Office Agency has produced a fact-sheet which you can download.

As usual, we would like to hear your experiences so please e-mail us with your comments.