Furnished Holiday Lettings - A Tax Guide

Fresh off the printing press, the second edition of Furnished Holiday Lettings – A Tax Guide was prompted by the Pawson case and the implications for business property relief on holiday lets. It has also been updated with revised HMRC guidance in relation to “dwelling houses” and new rules for fixtures in property.  This clear and practical guide expertly written by taxation specialist John Endacott includes useful guidance inspired in response to the furore over the proposed abolition of the furnished holiday lettings tax rules and the changes to the Finance Act 2011. Furnished Holiday Lettings - A Tax Guide

This informative book is a practical guide to the tax rules relating to furnished holiday homes and includes in its comprehensive contents, information on:

  • Background to the tax rules
  • Property letting or trading?
  • Meeting the qualifying criteria
  • Furnished holiday letting in the EEA
  • Sale of a property
  • Holiday lets and exemption from inheritance tax
  • Succession planning for Furnished Holiday Lettings
  • Rates, VAT and other UK taxes

Providing clear worked examples to explain the taxation implications of owning and running furnished holiday lettings, it makes a useful reference for your accountant and investors wishing to increase their own knowledge and is therefore recommended to:

  • Existing furnished holiday letting owners
  • Prospective holiday home purchasers looking to let their second homes
  • Those considering converting barns or out buildings into furnished holiday lettings

Furnished Holiday Lettings – A Tax Guide 2nd Edition is available to purchase here.

For advice on specialist insurance for furnished holiday lettings get in touch with our dedicated team on 01237 429444.

Holiday Home Owners Are Warned To Be Prepared For The Thaw. Winter 2010-11 already shows signs of being an unusually cold one throughout the UK. The Met Office forecasters are suggesting that the cold spell which began in November could persist well into January. After a decade or more of relatively mild conditions the sub-zero temperatures of the past three winters have taken some holiday home owners by surprise. As a result escape of water claims have spiralled for many insurers.

Mark Lavington, Director of Holiday Home Insurance specialists, Boshers Ltd offers his tips to help mitigate potential water damage this winter. Mark says: “The cost and personal inconvenience caused by a burst pipe claim can be considerable with claims often running into many thousands of pounds. Just a small fracture can release hundreds of gallons of water into your holiday home; damaging carpets, walls, ceilings, personal items as well as potentially rendering your let property uninhabitable until essential repairs and redecoration is carried out.”

The chance of suffering these losses can be reduced and Boshers recommend furnished holiday let owners taking the following steps to do this:

General tips:

  • Check the location of your stopcock.
  • Check whether your boiler needs servicing.
  • Check the insulation on your water pipes and cold water tank, those in the attic or other vulnerable spaces should be lagged or similarly protected.
  • Modern methods of insulation can be so effective in keeping heat within your property that attics can become very cold, this could cause a pipe to freeze. We therefore recommend you keep your loft hatch open if you have pipes in the attic to keep this area warm. Consider consulting your friendly plumber to see if your water and heating systems can be redesigned to negate the need to have pipes and header tanks in the attic.
  • Keep doors between heated and unheated rooms open to allow warm air to circulate.
  • Keep cupboard doors open below sinks to allow warm air to circulate around the plumbing.
  • Seal any holes or gaps that may be letting cold air into your property.
  • Make sure any valleys and gulley’s on your roof are kept clear and free from debris.
  • Make sure any external taps are turned off and disconnect any hoses.
  • If you discover a frozen pipe don’t wait for it to burst.

Turn off your water supply and then slowly thaw the affected pipe by introducing gentle heat to the area e.g. hair dryer, space heater, hot water bottle. DO NOT attempt to thaw the pipe with a blow torch or other open flame such as a cigarette lighter or matches.

What if the property will be unoccupied?

  • Keep your property heated to reduce the chance of a pipe freezing.
  • If unoccupied for an extended period drain and shut off your water system.
  • Ask somebody to check on your property daily. This may not prevent a loss but early identification of an escape can help reduce the ultimate cost.
  • Ensure you have complied with any unoccupancy conditions or warranties listed in your policy.

What if the worst happens?

  • Turn off the water supply at the stopcock. This should prevent any more water escaping into your property.
  • Where practical try and catch any excess water in a bucket or other container.
  • Do not use any electrics if you believe these may have been affected by the escaping water. You will need to have these checked by a professional electrician.

Additional guidance and holiday home insurance quotes are available from Boshers on 01237 429444 or for further information on UK holiday home insurance visit the website page most relevant to you:


Second Home Revival. A recent report by Knight Frank examines the growing demand for new-build holiday homes in the UK. The report highlights some interesting statistics such as in the three years up until the beginning of 2010, the growth in nights spent in self-catering apartments grew by 67% to 9.2m and the number of nights in self-catering houses, cottages and lodges grew 20% to 20.8m.

In terms of age groups the, the greatest growth in the tourist industry at present is accounted for by mature people in higher social groups. The trend towards staycations is becoming increasingly concentrated at the upper end of the market and is becoming spread more evenly throughout the year.

Read the rest of the report entitled Second Home Revival here….

Holiday Home Insurance – cover for evicting “Squatters”. Thankfully the risk of squatters occupying well managed holiday cottages marketed at a fair rate to ensure high occupancy throughout the year is slim. However with problems surrounding the supply of affordable housing in rural and coastal areas the threat is ever present. Not all holiday home insurance policies are the same and certainly do not offer equal value for money.

Boshers holiday home insurance policy has a bespoke Legal Expenses section arranged by Ecclesiastical with DAS Legal Expenses Insurance Company Limited. Our policyholders benefit from a bespoke holiday let section. DAS will negotiate for policyholders legal rights to evict anyone in their property who does not have their permission to be there but not including claims arising from or relating to a lease of land or buildings of more than 56 days.“Squatting” is not a legal term and when a holiday home is taken over for a short period, the legal position is usually simple: the owner can obtain an eviction order.

However, the process can be dragged out by technicalities and end up taking time and treasure to sort out.

Under section 6 of the Criminal Law Act 1977 it is a criminal offence to use violence or a threat of violence to gain entry to a holiday home if someone, such as a squatter, is present. But it is not a criminal offence to go in yourself, if you do it peacefully, or to break back in and change the locks if no one is there. That is why squatters lock doors and keep one person in at all times.

Different rules apply if squatters move into a holiday home that is occupied. In that case, the holiday home owner can force a way in or the police can evict the squatters. However, the police can be reluctant to act. Our clients benefit from comprehensive cover and peace of mind when insuring their furnished holiday lets with our specialist Holiday Home Insurance contract.

As an insurance broker, specialising in holiday home insurance for furnished holiday lets across the UK; we are increasingly being asked questions by owners and their agents regarding legislation surrounding the operation of a holiday cottage. Insurance is our speciality and we are not lawyers, so we will often seek our own guidance from the relevant authority. This post relates to Furnished Holiday Lets | Food Hampers | Food Hygiene Legislation.

A recent query was regarding owners who as a gesture of goodwill provide a welcome hamper of food for their self-catering guests which may include for example a home baked cake, pot of home made jam etc. In particular would such activities fall within the Food Hygiene Legislation.

Another scenario which we are asked about is where the property owner lives adjacent to the holiday cottage and offers a service whereby they will cook breakfast for their guests in the holiday cottage, or even offer to cook evening meals by request in return for payment.

Your local authority is responsible for monitoring food hygiene and I approached ours for guidance on the above two scenarios.

This was their response:

“I would advise that a holiday cottage owner who provide a welcome hamper would be required to register as a food premises to comply with Regulation (EC)852/2004 Article 6 Paras 1 and 2. However such a premises would not fall within our inspection programme. Similarly registration would also be required for the second scenario and in these circumstances the business would receive an inspection the frequency of which would be related to risk. The food businesses operator must ensure that the competent authority has up-to-date information on establishments including notifying any change in activities and closure. The Registration relates to production, processing and distribution of food.”

If either of the above scenarios reflect services that you offer to your guests and you havn’t already registered with your local authority, I recommend that you do so. The procedure seems very straightforward and given the minimal risk you can expect your authority to treat you with a very light touch.

A quality Holiday Home Insurance policy such as that provided by Boshers Ltd and underwritten by Ecclesiastical Insurance Office PLC includes liability resulting from injury or damage caused as a result of the property owners actions or products provided by them. As always due care should be taken by the policy holder including abiding by relevant legislation.

More information regarding keeping food safe is available from the Food Standards Agency

You may find the following holiday home insurance articles of interest:

For further information on UK holiday home insurance call our team on 01237 429444 or visit the website page most relevant to you:

Holiday Let Restoration Projects Sought By Holiday Cottages Magazine. Are you thinking about turning an old barn, brewery or bakery into a holiday let? Or any other pre-1945 building? If so, and you would like free advice on the project, read on.
In conjunction with Robert Hill of the Historic Building Advisory Service, Holiday Villas and Cottages are planning a new ‘house doctor’ series that welcomes questions from readers about any aspect of planning, building or related matters, and which may interest other readers. In addition Holiday Villas and Cottages are looking for one proposal where an owner is considering a conversion or restoration project that could be used as a case study. If you have either a particular question or a property that has an interesting background and needs expert advice and opinion, please e-mail details and images to info@merrickspublishing quoting ref: Boshers Blog. Should you require advice on holiday home insurance in connection with a conversation please contact Boshers Ltd who will be happy to advise you.  
Click this link to read an article about Historic Holiday Homes in a recent issue of Holiday Villas And Cottages Magazine.
The Chancellor has confirmed that the Furnished Holiday Lettings Rules will be withdrawn from 2010/11. The Chancellor has confirmed that the Furnished Holiday Lettings Rules will be withdrawn from 2010/11. Self-catering industry bodies continue to lobby the government. In the meantime Boshers Holiday Home Insurance clients can purchase a copy of Furnished Holiday Lets – your Emergency Tax Planning Guide at a 30% discount via a link at   

Here is another Tax Guide written by renowned property tax expert Carl Bayley and published by respected Taxation advisors, 

Holiday Home Insurance Specialists, Boshers Ltd have negotiated a 30% discount off the purchase price of £24.95 + £1.95 P&P for our clients and friends. For discount code details and information on how to purchase a copy click this link: Furnished Holiday Lets – Emergency Tax Guide – 30% Discount 
Tom Entwistle of recently published the following review: “Given Carl’s extensive knowledge of UK property taxation rules, this guide is about as good as it gets in regard Furnished Holiday Lettings taxation, coming up to the major changes in the law after 6 April 2010.

Despite the many uncertainties as to the exact situation after 6th April, as we are still waiting on detailed guidelines from HMRC, Carl gives some very relevant insights into the future and some valuable pointers as to what you can do in the short-term, if you are in the Holiday Lettings business.

Carl starts by comprehensively recapping the rules as they stand today; examining each of the main tax reliefs available until 5th April next, in turn.

One by one he considers what action landlords can take in the short-term to maximise the reliefs they can claim before the abolition of the current regime.

Having considered the short term, Carl goes on to consider the potential future landscape after 6th April next. Using lots of practical examples the guide is easy to follow for the layman and professional alike.

Interestingly, chapter 8 considers a possible “work-a-round” in the form of a Trading Status alternative to Holiday Lettings Businesses, similar to that of guest houses and hotels.

Chapter 9 considers the issues around adopting property as holiday lets in the time left, and Chapter 10 looks at the temporary extension of the Furnished Holiday Lettings regime to the European Economic Area (EEA).

This tax guide is a must for any landlord with Holiday lets.”

Buy your copy of Furnished Holiday Lets – Emergency Tax Guide – by Carl Bayley BSc ACA at a 30% Discount here.