From April 2023, new eligibility rules for business rates will
apply to self-catering properties in England and Wales.
If you don’t meet these rules your property will become eligible
for paying Council Tax.
The rules will be used in assessments from 1 April 2023. The
information about lettings during the 2022/23 operating year will
be used to determine whether a property is eligible.
The changes
The new eligibility rules are different depending on whether your
property is in England or Wales.
If your property is in England:
To continue to be eligible for business rates, from 1 April 2023
your property must be:
- available for letting commercially for short periods that
total 140 nights or more in the
previous and current year.
- actually let commercially for 70
night or more in the previous 12 months.
If your property is in Wales:
To continue to be eligible for business rates, from 1 April 2023
your property must be:
- available to let commercially for short periods that
total 252 nights or more in the
previous and current year.
- actually let commercially for 182
nights or more in the previous 12 months.
The VOA looks at whether the property was occupied immediately
before midnight to establish whether a property was let on a
certain night.
For example, this means that a property let out from Friday
evening to Sunday morning would have been let for two nights for
the purposes of meeting the self-catering criteria.
What being let commercially means
When we talk about commercially let properties, we mean
properties that are let with the intention of making a profit.
This usually means the property is let at market rates and
actively advertised. For example, using holiday cottage websites,
estate agents, and tourist web pages to advertise the property.
Any non-commercial lettings, for example lettings to family and
friends for amounts below the market rates, would not count
towards commercial lettings.
Who is affected
The new rules apply only to properties classified as
self-catering holiday lets by the VOA within the broad use
category of short stay accommodation . They don’t apply to other
types of accommodation in this category, such as hotels, hostels
and guest houses.
There won’t be any exceptions in the application of the new
eligibility rules. They will apply equally to all self-catering
properties across England and Wales.
New self-catering properties will be liable for Council Tax until
the property meets the eligibility rules.
When properties will be assessed using the new
rules
Valuation officers conduct a rolling programme to check that
properties listed as self-catering properties in the non-domestic
rating list meet the eligibility rules. A valuation officer will
ask for this information in the ‘Request for Information’ form,
which will be sent to you at a later date. It will consider
whether you meet the new rules on your actual lettings for your
property in 2022/23.
The rolling programme means we will ask customers to give us
information at different times during the 2023/24 operating year.
But we will be using a universal date, from which we will assess
whether the new eligibility rules have been met, of 01 April
2023.
The new eligibility rules will be used in assessments made from 1
April 2023.
Properties may also be reassessed for other reasons. For example,
if there has been a change of circumstances or a change of use.
We usually tell customers to tell us as soon as they know about a
change in circumstances, such as a self-catering property no
longer being used this way. This is so we can add it to the
Council Tax Valuation List, and your local council can contact
you about your Council Tax bill.
But you don’t need to tell the VOA if you know you won’t meet the
new eligibility roles on lettings until after 01 April 2023. This
is because we can’t make changes to the Rating List on the new
eligibility criteria until it comes into force.
The information used in assessments
The VOA issues forms called ‘Requests for Information’. One of
them has been designed specifically for self-catering units and
holiday cottages. The information provided on this form is used
to check that the eligibility rules for self-catering properties
are met.
It’s important that you return this form in time – you will be
liable to a financial penalty otherwise. It’s also important to
complete it accurately, as it’s a legal document and there can be
serious consequences for including false information, including
prosecution.
Support available
There are a number of reliefs available to assist businesses,
including the Small Business Rates
Relief scheme (SBRR). You can find out more about reliefs by
contacting your local council.
Any questions about business rates or Council Tax payments should
be made to your local council.
