Tourism Alliance and VisitBritain against repeal of FHL rules

The Tourism Alliance and VisitBritain are working closely together towards recommending that Government keep Furnished Holiday Lettings (FHL) Rules as they are to avoid putting unnecessary strain on self-catering accommodation providers.

The FHL Rules were established by the Government in 1984 to differentiate self-catering properties from residential lettings and awarding them the same tax regime as an ordinary trading business.

These rules are now in danger of being repealed, which would impact negatively not only on self-catering operators, but also on the whole UK tourism industry, according to the Tourism Alliance, who argue that they are an important source of revenue and employment, particularly in rural and seaside areas.

The exact impact of repealing the FHL rules is difficult to assess given the different circumstances of self-catering operators, but the Tourism Alliance prepared scenarios to estimate this impact. These showed that someone buying a self-catering business and running it for five years before selling it on would be worse off by £12,000 to £25,000 if the rules are repealed with no mitigating measure in place.

The case put forward by VisitBritain and the Tourism Alliance is that repealing the FHL rules would be highly detrimental to the self-catering industry by making entry into the sector more difficult and expensive and by reducing investment into existing businesses.

The Tourism Alliance said in a recent document stating their case that they are “confident that alternative proposals can be identified that will both comply with EU requirements and protect tax revenue without damaging the self-catering sector or the rural and seaside tourism economies that depend on tourists who use these properties.”