Holiday Cottage

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Holiday CottageRateable Values: Your Holiday Cottage

If we said 140 days to you would this seem a long period of time?

That’s a little over four and a half months or in terms of the tourism season, approximately the length of time between this year’s Easter Sunday and the return to the classroom of many children across the country in early September.

The vast majority of holiday cottage owners in England will have their properties available during this period and beyond. As a result the Valuation Office Agency (VOA) will assess them for a rateable value. A process which is used In order to establish the level of business rates for holiday cottages.

What is a Rateable Value?

The rateable value of a property is a professional assessment of the annual rent your holiday cottage could obtain. It’s a key factor used by your Local Authority to calculate the level of business rates you should be paying.

If your holiday cottage is let for more than 140 days in a financial year then it will be assessed for a rateable value.

What is taken into consideration when calculating the ratable value of your holiday cottage?

When assessing property such as offices, shops or other industrial premises there is a wide range of rental evidence from which Local Authorities can compare, contrast and establish rateable values.

The VOA explain that because very few locations have this level of rental evidence for holiday cottages they often need to use other methods in order to establish a ratable value, such as the gross receipts your cottage takes during the valuation period. This allows them to build a picture of the potential income your cottage could make and in doing so, establish what someone would otherwise pay in rent for the property.

They may also take into consideration the type, size, location and the quality of accommodation your property provides when making calculations.

How is this information gathered?

If you have a holiday cottage that should be rated then you’ll need to complete a ‘Request for Information’ form.

The V06048 form has been designed specifically for holiday cottages and self-catering units, with the questions designed to take into consideration differences in tariffs, marketing, levels of service and other factors such as quality of furnishings.

The overall aim of the form is to establish the income you gain from the property and the level of expenditure required to achieve that income.

What do you do if you believe that your rating is wrong?

If you believe the ratable value of your holiday cottage is incorrect you should contact your local Valuation Office. If you’re still unsatisfied with your rating you’re able to launch an appeal, which is known as making a ‘proposal’ to alter the rating list.

You can make a single appeal to the rateable value of your holiday cottage during the ‘life’ of the rating list, which usually lasts for five years (the current list runs from April 2010 to 31 March 2017).

To appeal against your listing you can visit www.voa.gov.uk or by obtaining a form from your local Valuation Office. Other points to note are that non-domestic rates or business rates are an allowable expense and therefore tax deductible for income or corporation tax purposes. Any owners accommodation should remain subject to council tax.

Boshers are specialist providers of insurance for holiday homes and cottages. For more information on how a specialist insurer can help and support your holiday home please give us a call on 01237 429444.

5 replies
  1. Chris Jones
    Chris Jones says:

    An interesting item for holiday home owners. Many owners pay council tax on their holiday home, not understanding that the business rate is often much less. Over last few years Small Business Rate Relief (SBRR) has been applied, so that many owners have paid no rates at all. Sadly, many are missing out.

    Reply
  2. Cherry Hinton
    Cherry Hinton says:

    Could you tell me if the income from a self- catering property is a deciding element as to whether you can apply for business rates and then be exempt from Council Tax .I live in Wales and we have always paid full Council Tax- the local Council has a non- occupancy rule of two months each year to prevent people using them for residential .can you revert to normal rates if in the future the small business rate is changed to a more expensive system?

    Reply
    • Mark Lavington
      Mark Lavington says:

      I’m afraid that we are not qualified to provide advice on individual cases relating to holiday home business rates verses council tax. We would recommend that you take advice from your local authority responsible for the area in which your holiday letting property is situated.

      Reply
  3. Liz Pearce
    Liz Pearce says:

    can you apply for rate relief on more than one holiday let property if each of them has a rateable value below £2500?

    Reply
    • Mark Lavington
      Mark Lavington says:

      We recommend holiday let owners direct questions about their individual circumstances to their local valuations office. Whilst we are happy to give an overview we’re unable to give specific guidance on holiday homes and business rates.

      Reply

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