𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

The Labour Government is considering plans for a tax raid on holiday cottages. John Healey is considering taxing holiday lets as second homes rather than as businesses in his maiden Autumn Budget on October 28.

It will add thousands of pounds to the cost of running them, with Alistair Handyside, chairman of the Professional Association of Self-Caterers, saying it could add between £1,000 and £3,000.

It could also have a knock-on effect on businesses around holiday lets, such as local pubs, restaurants, independent shops, and other tourism-related companies. This could mean Brits see increased prices or limited availability.

Richard Fuller, the shadow chief secretary to the Treasury, said: “Labour has launched a £9bn business rates raid, compounding the damage done by its jobs tax and employer red tape.

“Now it is looking for ways to pull more and more people into scope for its crippling taxes, including with a holiday cottage tax. Labour should focus less on squeezing taxpayers dry and more on cutting the welfare bill so we can cut taxes and grow our economy.”

James Murray, a junior Treasury minister, confirmed in a written parliamentary answer that his department was reviewing “the tax treatment of short-term lets, such as self-catering accommodation”.

He said “concerns have been raised” about second-home owners using small business rates relief to manage tax liabilities. The shake-up could mean that all self-catered accommodation is subject to council tax rather than business rates.

Alistair Handyside, chairman of the Professional Association of Self-Caterers, said: “The average self-catering business owns 1.2 properties and it is usually a second income, often run by working mothers or retired people, who have already been hit by 25 Government interventions in the past four years.

“The self-catering sector is already declining, and a lot of people will decide it’s just not worth it any more. I can tell you that the Government already takes more money out of my business every year than my wife and I do.

“What the Government doesn’t realise is that holiday lets provide the bed space for people visiting areas that don’t have the hotel spaces that London and big cities have.

“If the bed spaces decline, so does the local economy, because pubs, restaurants, butchers, all sorts of businesses only stay in profit because of the annual influx of tourists.

“So I would just say to the Government, be careful what you wish for.”

A Treasury spokesman said: “The Chancellor is fully focused on his priorities, to give families and businesses a bit of breathing space, back British jobs, and drive growth in every postcode, underpinned by a commitment to meet the fiscal rules.

“As has always been the case, decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.”