Will I need to pay Council Tax?
If you are renting out an Airbnb property as a vacation let or as a vacation property, then you may not have to pay Council Tax. You are only liable to paying Council Tax if you pay Income Tax.
On the other hand, if you are paying Business Rates, then you won’t be liable to pay Council Tax.
You will need to pay VAT if your rental income is more than £85,000. If you need assistance to cover this, you can slightly increase your nightly rate, which is something your Sevenstays account manager can advise you on.
Is there any government assistance for holiday let hosts?
There are several tax reliefs and benefits available to UK FHL hosts. These are the Micro-Entrepreneurs allowance, and the Capital Gains Tax reliefs.
- Micro-Entrepreneurs Allowance This is a scheme aimed at supporting small businesses. If you are letting out properties on platforms like Airbnb, the scheme enables you to deduct £1000 from your gross income, in order to calculate your taxable annual income.
- Capital Gains Tax relief If your property is classified as a FHL, you can claim Capital Gains Tax relief for traders, Business Asset Rollover Relief. In short, this means that if you have a property qualifying as a FHL, and you own an investment property which you don’t live in but want to rent, you can be eligible for a reduction in Capital Gains tax on the sale of your first property when you sell one FHL property, and purchase another under the roll-over scheme.