Furnished Holiday Letting Rules

[Martin_Sach_CE_EASCO]

EASCO and colleagues in the other countries of the UK are working on this case. It is one of the current major issues facing self catering operators, as it will make a significant difference to the tax position. EASCO is the English Association of Self Catering Operators and we are the trade association for self catering in England. We are members of the tourism Alliance, who represent all of UK tourism, and the case is being taken up by the Tourism Alliance with support from us and other members. We will be seeking a review by the Treasury of this issue.

[Windermere]

the English Association of Self Catering Operators

Am I alone in being totally flummoxed by the variety and relationships between the multiple bodies which purport to represent my interests?

What is the relationship between VB and EASCO (and wasn't EASCO a hit in the 1980s??)

[Jules]

You're most definitely not alone, it's farcical the number of different agencies, bodies, quangos, etc., etc., etc. I've been in this business for a very long time and still can't get to grips with who is who, who does what, who represents who and where, what is each organisation supposed do for me, and to make matters worse, many of them work against each other - there is a lot of politics going on. Everytime I fit a piece into the jigsaw they go change the picture - one body ceases to exist, another changes it's name, etc., so how on earth we are supposed to keep up with it all is beyond me.

In 15 years of running a highly successful self catering business (15 cottages), I have never heard of 'EASCO'. Perhaps Martin can tell us all more? When was this one created? What has it achieved to date?

I also think I must be missing something, but Martin's post looks like a response to another about tax??? However I can't see a previous post. Perhaps I'm reading it wrongly....




Coquet Cottages (http://www.coquetcottages.co.uk/)

[browning12]

All

I can understand your concern at the myriad of trade associations/tourist organisations that purport to support and/or represent us etc. I have become confused by it all as well.

When we first started letting our cottage, we were looking for different online places to advertise our cottage and we came across EASCO. I had my doubts but as it said that it was a trade association, had a page for advertising and the advertising rates were quite low compared to some places I took a gamble. I must admit that when the renewal came around I was very sceptical and probably wasn't going to renew as I didn't think that it added value and seemed too small fry in the scheme of things. However since all this hoo ha has kicked off after the budget and the announcement about the abolishment of the Furnished Holiday Letting rules, I think that EASCO has come into its own. I had always got a monthly newsletter from them with moderately interesting information but to be honest I had got in the habit of putting it to one side and never getting around to reading it properly. However, the information that Martin Sach has provided on the above subject has been so useful. To be honest I didn't really understand the implications or quite what the current rules meant. After reading about it in the newsletter it was a lot clearer. He has also been recommending for the last 2-3 months that people write to their MP's to ask for help and to ask for the MP's to sign an early day motion so that the government will properly review the impact to all of us of abolishing the current rules. He not only recommended this action but gave some really good bullet points for what to put in the letter. I have now written to both my own MP and the one where my cottage is located. It may not do a lot in the long run, but at least I feel that I have spoken up and tried to protect our business in these difficult times. I would encourage everyone else to contemplate writing to their MP about this also.

[BVC]

Hello, I have received a letter from Alan Beith enclosing a copy of a letter from Stephen Timms at the Treasury about the change to tax on furnished holiday lettings. As one who owns and lets out three holiday cottages on a straight forward basis I don't think my tax position will change. I quote from the letter
" Under the new rules, landlords of furnished holiday accommodation will continue to be taxed under the property income rules, but they will no longer be treated as if they were trading for some tax purposes. They may still claim business expenses such as mortgage interest, the cost of repairs, rates, utilities and emplyees wages as a deduction when they compute their taxable income from the property in the same way as they do now." I think there will be changes to Capital Gains Tax rules. As always the devil will be in the detail but the changes to the way of assesing tax are not as wide ranging as I at first feared.
I suggest anyone who is interested in this topic lobby their own MP to see what is happening.

[boshers]

I take my hat off to the board of EASCO (English Assocition of Self-Catering Operators) and there counterparts in Wales, Scotland and Northern Irelnd. My understanding is that they are run predominately on a voluntary basis by people like you who have a passion for and interest in the self-catering accomodation industry. These people give up their valuable time to debate and discuss current issues, often recognising opportunites and threats well before they become topical issues. They lobby the powers that be in the hope that commen sense will prevail, thus preventing the self-catering industry sinking in bureaucracy and ill thought through fiscal policy.

Recently representatives of EASCO and their colleagues in Wales, Scotland and Northern Ireland have come together to form FONSCA read more here (http://holiday-home-insurance-uk.blogspot.com/search/label/Federation%20of%20National%20Self%20Catering%20Ass ociations)=d>

[Martin_Sach_CE_EASCO]

[quote=Jules]
In 15 years of running a highly successful self catering business (15 cottages), I have never heard of 'EASCO'. Perhaps Martin can tell us all more? When was this one created? What has it achieved to date?


EASCO is the trade association for self caterers in England. We are a representative body, here to lobby on behalf of our members and to offer them membership benefits. There is no relationship between us and any other body although obviously we talk to other organisations and work with them. We are competely independent. VB is a government organisation, EASCO is a members organisation. See www.englishselfcatering.co.uk for details. Martin

[Windermere]

[
Today I sent this to Margaret Hodge Tourism Minister


Dear Madam

I received today an email from you in which you state:

“As part of the Government’s drive to aid economic recovery, the Department for Business, Innovation and Skills has developed a range of free support measures to help businesses, including tourism businesses.”

Given that your government is in the final stages of repealing the FHL legislation that will deliver a huge body blow to tourism businesses around the country, I find the timing and content of that e-mail quite amazing! It shows how out of touch this government is as regards the reality of the struggle being faced by this hugely important industry, and the lack of understanding that obviously exists about the effect of your own actions on it.

I would like to invite you in your capacity of Minister for Tourism to spend a day working with me on my trade of self-catering holiday lets. I would like you to see the myriad tasks I have to perform daily, including sales, marketing and administration. I would like you to see how much varied work is entailed in taking and administering each booking through from initial contact to end of stay cleaning.

At the end of that day I would like you to look me in the eye and tell me that what I do is not a “trade”, and is in fact just like letting a flat on an assured short hold tenancy for 6 months as Stephen Timms is, rather disingenuously, trying to suggest. Believe me it’s not – I’ve done that too.

I am not naive enough not to be able to see the pressure that your government found itself under with properties in the EU belonging to UK nationals enjoying the same rights as UK based businesses. However, I am afraid that your government’s response in initiating the repeal of the FHL legislation demonstrates a startling lack of integrity. Legislation is there to ensure equitable and fair treatment under government, not to maximise tax revenues.

Please accept my invitation – as Minister for Tourism you really ought to see what happens at the sharp end before you preside over us being consigned to the dustbin to gee up your government’s short term tax revenues.

I have copied this email to my local MP, and the MP for the area where my holiday let properties are, Tim Farron.

I trust that they will both be interested to hear your response. If you prefer not to accept my invitation I will happily extend it to either of them.

[greenbarncottages]

The recent email from VB containing the message from the Minister for Tourism, Margaret Hodge, with the unfortunate title of "Real help for businesses now" finally prompted me to set finger to keyboard and email the good lady (who as MP for Barking obviously has her finger very firmly on the pulse of the self catering holiday business), along with a few others who claim to represent us when they're not busy with their expense claims.

Amongst those was the Shadow Minister with responsibility for tourism, Tobias Ellwood. Mr Ellwood represents Bournemouth, and arguably has a few more constituents in the tourist business than Mrs Hodge, so should be hot on the case.

Pity, then, that he doesn't appear to have signed the Early Day Motion on FHL, which can be found here (http://edmi.parliament.uk/EDMi/EDMDetails.aspx?EDMID=38928)

Mr Ellwood's email address is ellwoodt@parliament.uk Thought you might like to know.

[Windermere]

Would it be possibe, please, to ask for an update from Visit Britain and EASCO detailling what action has been taken on our behalf over the last 6 months or so?

(BTW as you may imagine Margaret Hodge has not had the courtesy to reply to my invitation :-" )

[Windermere]

Further to my other email asking what the various agencies liek VB and EASCO have done , I received this this morning from teh office of Margaret Hodge


Thank you for your e-mail to Margaret Hodge about self-catering holiday lets. I have been asked to respond.

The Minister has raised this issue with Treasury Ministers and written to them setting out the industry’s concerns about these changes in detail. Our department and members of the industry also had a constructive meeting with the Treasury and HM Revenue & Customs (HMRC) at the beginning of October.

The Treasury and HMRC hope to publish their assessment of impact, together with draft legislation and guidance, at the same time as the Pre-Budget Report later in December and have agreed, in principle, to meet the industry again at that stage.

The Minister and this Department will continue to monitor this closely.

Best wishes

Simon Rushbrook
Public Engagement and Recognition Unit
Department for Culture, Media and Sport

[Moderator]

VisitBritain is working with self-catering operators to formulate their case against the abolition of Furnished Holiday Lettings Relief. Following discussions with a number of individual operators, Holiday Cottages Group, Hoseasons, the Association of Scotland's Self-Caterers and the Federation of Small Businesses in both Scotland and Wales, VB has joined with the Tourism Alliance (and the Wales Tourism Alliance) to provide input and case studies for the FHL action group. In addition to the meetings with individual operators, following such an approach, VB held a successful group meeting with concerned operators in Northamptonshire, as a result of which the local RDA is now firmly on board. VB is also providing regular briefings to members of Parliament and will keep self-catering operators informed of progress.

[Windermere]

Thank you for the update

[greenbarncottages]

As various somnolent bodies associated with the self catering industry gradually wipe the sleep from their eyes (and please note this comment is not aimed at the likes of EASCO and those who've been active from the incept of the FHL Tax changes) there seems to be a little more information crawling out on the effects of the proposal for FHL Tax changes, if indeed these become law.

I am neither accountant nor lawyer, and most definitely not a politician, so anything I say may be completely misguided, as it is merely gleaned from reading endless gobbledygook from HMRC, and some pithier information from some advisory and accountancy bodies. I'd be very interested to hear from anyone who has more facts on anything that follows.

A summary of the change seems to be that FHL will not be seen as a trading business (whatever that means in HMRC speak) but treated in the same manner as property investment. There will be significant impact on Inheritance Tax (IHT) and Capital Gains Tax (CGT), although presumably they only have an effect if you are looking to sell your properties, or die.

The changes affecting the running of the business are perhaps more relevant, and as far as I can work out we can all wave goodbye to capital allowances for equipment, furniture etc and instead we'll get a Wear and Tear allowance of 10% of income. That may or may not be a significant change, but it suggests that any significant capital items should, if funds allow, be purchased before 6th April 2010.

Those seeking to start up in the business are apparently going to be hit hard by the changes; we all know that starting from scratch is a hugely expensive undertaking, with a lot of up front expenditure to ensure the building meets requirements, fittings and furnishing. So we may well see considerably less people going into the business in the future.

An "interesting" change is that losses from running the business will no longer be able to be offset against other income. Now this may not necessarily be a bad thing (ducks). Those of us who take the business seriously are not looking to make a loss on an ongoing basis (losses are likely in the first couple of years, but these can be rolled forward - I think - to offset profits in subsequent years.) Indeed, for some of us it is our sole income. The owners who will be hit hardest by this change are those who have a property that they choose to let as FHL purely because of the current tax breaks; ie they seek to make a trading loss that they can offset against their other income, whilst maintaining subsidised ownership of a second home or investment property - although "investment" and "property" don't sit as comfortably together as was the case. One way they achieve this is to let the property and unrealistically low rates; enough to cover some outgoings, but not to make a profit. Providing a FHL in this manner seriously distorts the market, and affects the expectations of potential holidaymakers, adding to the misconception that self catering is all about putting up with cheap tat and indifference.

The tax changes could take a lot of those properties off the FHL rental market, and there are obvious potential benefits to the rest of us who do take the business seriously. However, it will reduce the choice for Customers, and it would be unfortunate if it also resulted in the loss of properties with caring owners if their margins no longer seemed worth the hassle of offering a FHL, and decided to go down the very much simpler route of 6 month lets instead.

One final thought - does anyone know if the changes would affect the existing rules on the maximum period (31 days?) that a FHL can be rented to the same person?

I've obviously generalised in the above, my assumptions may be wrong, but I offer it up as food for thought!

[barbersdrove]

I've been struggling with this and offer the following correspondence I've been having with the IR to clarify. As you will see, it's been difficult getting the correct information!

I decided to write to the lady whose name appears at the bottom of the IR document on their website re these changes. I wrote:

I hope you can help me I am confused re the proposed rule changes for Furnished holiday lets. So much so that I booked a call with one of the IR technical chaps and spoke to him yesterday. He tells me that I will still be able to claim capital
allowances for the plant and machinery I purchase for our proposed second letting unit (due to open in the summer) after April 6th 2010, whenever it is purchased. I was wondering whether I could save myself some money by purchasing them prior to the changeover date.

He agreed that the rules were changing re offsetting losses etc but not with regard to capital allowances in the UK. He stated that it will apply to properties within the European Economic union with exception for the UK. (I thought we were in the European Economic Union but I may be wrong). The Visit Britain Pink Booklet that sets out the legislation for people like us, seems to contradict what i was told as did the Tax expert I contacted through 'Ask an Expert' when I couldn't get through to anyone at the IR last week. I've read the document on the IR website which seems to confirm what Visit Britain and Ask an Expert have told me, namely that I will not be able to claim capital allowances for machinery used within letting unit after April 2010. Whereas the IR themselves are telling me I can continue
to claim them unless the property I am letting is abroad within the European Economic Union.

Hopefully you will be able to clarify this for me once and for all.

She wrote back:
Thank you for your email below.
On the 9 December HMRC published guidance about the tax treatment of those who let furnished holiday accommodation following the withdrawal of the furnished holiday letting (FHL) rules. This guidance can be found on our website at www.hmrc.gov.uk/pbr2009/withdrawing-lettings-rules-3760.htm.

The withdrawal of the FHL rules will apply to all EEA FHL businesses, including those within the UK. I am sorry that the information you were given earlier was incorrect, if you let me know who you spoke to I will contact them so that this does not happen again.

In general the withdrawal of the FHL rules will not affect the calculation of your taxable business profits, but it will change the tax relief available for capital expenditure. So, you may continue to claim your business expenses as a deduction when you compute your taxable income in the same way as you do now. Business expenses may include; mortgage interest, repairs, business utility bills, employee wages etc.

The published guidance explains how capital allowances will be affected. Briefly, for continuing FHL businesses such as yours
* capital allowances will continue to be available on expenditure incurred before 5 April 2010. For such expenditure, the normal rules on disposal proceeds, balancing charges and balancing allowances will also continue to apply.
* expenditure incurred after 5 April 2010 in providing plan and machinery that is not for use in the FHL property (e.g. the computer that you use to manage bookings and emails etc) will continue to qualify for plant and machinery capital allowances.
* expenditure incurred after 5 April 2010 in providing plant and machinery for use in the FHL property will not qualify for plant and machinery capital allowances.
* after 5 April 2010 you may also claim a tax deduction equal to 10% of net rents (known as the wear and tear allowance) in addition to any capital allowances that you are entitled to.

I replied:
Thank you for that answer. I'm afraid I didn't record the name of the person I spoke to although he did tell me, I just don't remember it. From your answer am I right in deducing that I could therefore benefit by purchasing capital items for the new unit prior to April 2010? I promise this is my last question.

to which she replied:
I am sorry but I am unable to give individual tax advice. I can only explain how the tax rules apply to different circumstances.

If you incur qualifying capital expenditure on plant and machinery for use in your FHL business (e.g. if you buy certain capital items) before 5 April 2010, then you will be entitled to claim capital allowances on those assets, even after the FHL rules have been repealed.

If you were to buy those same items on or after 6 April 2010, then you will not be able to claim capital allowances on them.

[imported_]

A further question: Will councils still regard FHLs as businesses when dealing with refuse collection?

[imported_]

The situation for caravan operators and cottage operators is crucially different. Caravans do not appreciate and in fact need to be replaced typically every 6 - 12 years. Cottages generally gain in value and do not have to contribute to a replacement. Caravan operators should be treated in respect of capital allowances the same as any other business which needs to replace expensive equipment. This is likely under the proposed legislation to cease to be the case for smaller businesses, which will give another advantage to larger parks.

[greenbarncottages]

The situation for caravan operators and cottage operators is crucially different.

Not necessarily in all cases. A couple of examples:

Our cottages are in a barn conversion within our grounds. The planning restrictions state that the barn cannot be sold separately from the house, and the cottages cannot be used as dwellings - only holiday lets. Hence the notion of property investment implicit within the proposed tax changes is a nonsense. We've invested half a million in a business, not in property.

Agreed, unlike caravans, the properties themselves shouldn't need total replacement (!); however, by way of another example, friends of ours have three timber lodges nearby - again restricted to use purely as holiday lets - and they believe the lodges have a finite life. This should be considerably longer than a caravan, but again, not an appreciating asset.

In both cases the potential major maintenance costs are more than likely to exceed the wear and tear allowance over a period of years; just consider the thousands required to replace a bathroom and kitchen purely for the sake of a business and you'll see what I mean, without having to go any deeper!

So I think many of us are in the same boat as the smaller caravan operator. We may be on different decks, but that counts for little when the boat is sinking! To continue the sinking boat analogy, those who operate FHL's as a sideline purely for the tax breaks at least have their own sturdy liferaft, in the form of property value and long term lets. Those of us fully committed to the tourist industry are being offered a leaky little rowing boat and one oar.

We all stand to lose if the boat we're all in sinks, so we all need to do our best to keep it watertight. Hands up those who haven't yet written to their MP and HMRC?

[imported_]

I am very interested in your situation regarding your barn conversions which were purposely done as a tourism business, we are in exactly the same situation, for all the same reasons. I wrote to my MP when this first reared its ugly head last April. I struggled at that time to get anyone interested who was in the same business. I think people just didn't have time to try and work out the implications. I did receive a reply from Stephen Timms the financial secretary to the treasury, basically he wrote to me saying that if it suits the government to class FHL's as a trade for certain taxes then they will do that and if it suits to treat FHL's as a business for a different tax then they will treat FHL's as a business. Never mind having only one oar I think we are sunk but like Churchill I will not be defeated and the bulldog will out!
What beggars belief is the amount of work I put into running thios business, admin, promotiing, cleaning, maintenance etc someone who lets a property on a 6 month long let does absolutely nothing. I spoke to my accountant to see about charging my time against the cottages as they look more profitable with my free labour and if we cannot get the tax breaks when we finaly sell I would like something for my labours now. But NO as I am self employed I cannot cnarge my time against the cottages!!!! So if i emplyed somone to do my job I could charge their time but not my own. None of it makes sense and it feels like another kick in teh teeth for a very hard working dedicated group of people.

[AlanB]

Does anyone have any idea when there will be a definitive statement on the new rules?

I was hoping that registering with VB would give me access to up to date information from experts. In reality it seems that we are benefiting from individual members who are kind enough to share the details of thier own research. Very interesting, possibly correct, but not something we should necessarily rely on.

My accountant tells me that in practice I will experience very little change. If I make a loss (as I did this year having spent a lot of money on building repairs), I will not be able to off set that against any other income, although I will be able to carry some forward to future years.

Whilst I hope he is right, it seems from these discussion boards that the situation is still uncertain and he is probably not in a position to advise more than anyone else.

Perhaps EASCO is more able to advise?

[barbersdrove]

I did post previously a correspondence I have had with the horses mouth, the person who wrote the document re this for the Inland Revenue. I would say though that it's not safe to ring and ask the IR for a definitive answer as the 'technical expert' I originally spoke to re this gave me the wrong info and as i was suspicious I e-mailed the person who wrote the document to clarify.

[barbersdrove]

Here is a copy of the correspondence referred to.

I wrote

Can you help me please as I am very confused about the information I'm gathering re the proposed rule changes for Furnished holiday lets. So much so that I booked a call with one of the IR technical chaps and spoke to him yesterday. He tells me that I will still be able to claim capital allowances for the plant and machinery I purchase for our proposed
Second letting unit (due to open in the summer) after April 6th 2010, whenever it is purchased. I was wondering whether I could save myself some money by purchasing them prior to the changeover date.

He agreed that the rules were changing re offsetting losses etc but not with regard to capital allowances in the UK. He stated that it will apply to properties within the European Economic union with exception for the UK. (I thought we were in the European Economic Union but I may be wrong). The Visit Britain Pink Booklet that sets out the legislation for
people like us, seems to contradict what i was told as did the Tax expert I contacted through 'Ask an Expert' when I couldn't get through to anyone at the IR last week.

I've read the document on the IR website which seems to confirm what Visit Britain and Ask an Expert have told me, namely that I will not be able to claim capital allowances for machinery used within letting unit after April 2010. Whereas the IR themselves are telling me I can continue to claim them unless the property I am letting is abroad within the European Economic Union.

Hopefully you will be able to clarify this for me once and for all.

She replied


On the 9 December HMRC published guidance about the tax treatment of those who let furnished holiday accommodation following the withdrawal of the furnished holiday letting (FHL) rules. This guidance can be found
on our website at www.hmrc.gov.uk/pbr2009/withdrawing-lettings-rules-3760.htm.

The withdrawal of the FHL rules will apply to all EEA FHL businesses, including those within the UK. I am sorry that the information you were given earlier was incorrect, if you let me know who you spoke to I will contact them so that this does not happen again.

In general the withdrawal of the FHL rules will not affect the calculation of your taxable business profits, but it will change the tax relief available for capital expenditure. So, you may continue to claim your business expenses as a deduction when you compute your taxable income in the same way as you do now. Business expenses may include;
mortgage interest, repairs, business utility bills, employee wages etc.

The published guidance explains how capital allowances will be affected. Briefly, for continuing FHL businesses such as yours,
* capital allowances will continue to be available on expenditure incurred before 5 April 2010. For such expenditure, the normal rules on disposal proceeds, balancing charges and balancing allowances will also continue to apply.
* expenditure incurred after 5 April 2010 in providing plant and machinery that is not for use in the FHL property (e.g. the computer that you use to manage bookings and emails etc) will continue to qualify for plant and machinery capital allowances.
* expenditure incurred after 5 April 2010 in providing plant and machinery for use in the FHL property will not qualify for plant and machinery capital allowances.
* after 5 April 2010 you may also claim a tax deduction equal to 10% of net rents (known as the wear and tear allowance) in addition to any capital allowances that you are entitled to.

I then wrote
Thank you for that answer. I'm afraid I didn't record the name of the person I spoke to although he did tell me, I just don't remember it. From your answer am I right in deducing that I could therefore benefit by purchasing capital items for the new unit prior to April 2010

She replied

I am sorry but I am unable to give individual tax advice. I can only explain how the tax rules apply to different circumstances.

If you incur qualifying capital expenditure on plant and machinery for use in your FHL business (e.g. if you buy certain capital items) before 5 April 2010, then you will be entitled to claim capital allowances on those assets, even after the FHL rules have been repealed.

If you were to buy those same items on or after 6 April 2010, then you will not be able to claim capital allowances on them.

[Windy]

What is realy irritating is the "we are going to treat you as though you are an buy to let landlord" because it suits us to do so, but hang on - we won't give you the VAT exemption they get.

That is simply unfair and I have asked my MP to get Timms / Hodge to provide their justfication for this. I'm not holding my breath though.

I'll swap capital allowances for the VAT exemption I ought to get in a fair world quite happily

The whole thing is as it stands currently is a ludicrous and very unfair mishmash.

Bad legislation from a failed government.

I run wooden lodges, and they have a funny life cycle. On a 50 year lease they *may* appreciate a little in the first years but then they go down in value like a stone towards the end of the lease. Caravans on a 10 year lease would just go down in value straight away.

Obviously legislating fairly to take into account these sorts of differences is beyond the limited abilities of our chums at the Treasury.


"In general the withdrawal of the FHL rules will not affect the calculation of your taxable business profits... So, you may continue to claim your business expenses as a deduction when you compute your taxable income in the same way as you do now. Business expenses may include; mortgage interest, repairs, business utility bills, employee wages etc."
...
* after 5 April 2010 you may also claim a tax deduction equal to 10% of net rents (known as the wear and tear allowance) in addition to any capital allowances that you are entitled to."

So can I claim for revranishing my lodges as WELL as claiming the 10% wear and tear allowance? It is a regular business expense and it is not replacing equipment.

It seems odd that I will be able to continue to claim CA on my existing lodges as ELL as claiming the 10% as she says very clearly there.

[mrjonbeavan]

Can anyone please help me with a definition of a Furnished Holiday Let I have read loads and my accountant can't help.

We run a series of bunkhouses and a campsite very much as a business. I am wondering if the bunkhouses will be classed in under the FHL rules. If so will it be the same for Travel lodges etc who do not provide breakfast!

[Windy]

It would appear that FHL repeal wil now have to wait until after the election as it has been lost in the "wash up" (or is it "wash out") that we now have.

[Andy]

Does your latest comment refer to the new FHL rules from 06.04.10.? Watching Newsnight last night (Tuesday 6th April)- I'm sure I heard that Labour had done a Uturn on a few issues, one of which was the new FHL rules. Have you heard anything more ?

[wasco]

The Budget 2010: Furnished Holiday Lettings
"The Government to publish a public consultation over the summer"
Although George Osborne said in his Budget speech the FHL rules would not be withdrawn and the current rules will continue to apply for the tax year 2010-11, the government has yet to decide how the rules will have to be changed to comply with EU regulations. Consequently the government will publish a further consultation which will look at a proposal which would:

• ensure the FHL rules apply equally to properties in the EEA;
• increase the number of days that qualifying properties have to be available for, and actually let as, commercial holiday letting; and
• change the way in which FHL loss relief is given.

For more information see below HMRC's announcement or go to
http://is.gd/cZeO5.

HMRC: Budget 2010: Furnished Holiday Lettings (http://is.gd/cZeO5)

The furnished holiday lettings rules (FHL) will not be withdrawn from 6 April 2010 (1 April 2010 for companies).

Since 22 April 2009 (Budget 2009), HM Revenue & Customs (HMRC) has applied the current FHL rules to UK taxpayers with qualifying holiday lettings situated elsewhere in the European Economic Area (EEA). Such businesses can currently choose whether to be taxed under the FHL rules or under the normal rules for property businesses. These arrangements will continue to apply for the tax year 2010-11.

The Government will publish a public consultation over the summer about plans to change the tax treatment of furnished holiday lettings from April 2011. The consultation will specifically look at a proposal which would:

• ensure the FHL rules apply equally to properties in the EEA;
• increase the number of days that qualifying properties have to be available for, and actually let as, commercial holiday letting; and
• change the way in which FHL loss relief is given.

Full details about the proposed changes will be published over the summer.

Draft legislation will be published in the autumn, with a view to inclusion within Finance Bill 2011.

For more information go to http://is.gd/cZcGH to view and/or download HMRC's 'Furnished Holiday Lettings - Questions and Answers' guide published 22-Jun-10.