Reponse on holiday lets expected

The government is expected to give its response to a consultation over changes to tax rules which could affect thousands of tourism businesses next month.

Furnished Holiday Lets (FHLs), such as self catering cottages or apartments, currently benefit from various tax reliefs, normally only available to people carrying on a trade, such as the ability to claim allowances on items such as furniture, kitchen fittings and household appliances used in the property and off-setting losses against other income.

In its Emergency Budget in June, the government put forward changes to the rules which would affect those tax breaks and save the government �20m.

The changes, which would take effect from April 1, 2011, for companies or from April 6, 2011, for individuals, are aimed at favouring those people running furnished holiday lets on a commercial basis.

They include increasing the minimum period that a qualifying property must be let out for in a year, from 10 to 15 weeks. The minimum period a property must be available for letting in a year would also be increased, from 20 to 30 weeks.

David Gauke, exchequer secretary to the Treasury, has now said an update on the proposals will be given on December 9.