Holiday lets and business rates

Even though the furnished holiday lettings tax regime has ended, landlords still need to track days let for business rate purposes. Depending on the lettings profile, the property may qualify for business rates instead of council tax, which can be advantageous. Rules differ for England and Wales (and are different again in Scotland and Northern Ireland).

England

A holiday let is treated as self-catering and valued for business rates if:

• Available to let ≥ 140 nights/year, and

• Actually let ≥ 70 nights/year.

Small business rate relief:

• Rateable value < £12,000 → 100% relief (no business rates) if it’s the only business property.

• £12,000–£15,000 → relief reduces gradually from 100% to zero.

• 2025/26 small business multiplier: 49.9p per pound (outside London), 51.9p (London).

To switch from council tax to business rates, landlords must apply via the Valuation Office Agency. Relief is claimed from the local council (not automatic).

Example 1: Rateable value £9,000 → 100% relief → £0 payable.
Example 2: Rateable value £13,500 → Rates £6,736.50 → 50% relief → Pay £3,368.25.

Second properties: Relief continues for 12 months, then only if no property exceeds £2,899 in rateable value and total is < £20,000 (< £28,000 in London).

Wales

To qualify for business rates:

• Available to let ≥ 252 nights/year, and

• Actually let ≥ 182 nights/year.

Small business rate relief:

• Rateable value < £12,000.

• Full 100% relief if value ≤ £6,000.

• Relief tapers from £6,000 to £12,000.

• Limited to two properties per local authority.

• Relief is given automatically