Council Tax in Aberdeen

[Roddy4]

Good Evening folks,

I have a 1 bedroom flat in central Aberdeen, Scotland, listed on AirBNB

I’d be most grateful if  anyone might be able to advise what arrangements apply for Council Tax in Aberdeen city?  Should I be increasing my nightly rate to cover it or do apply for business rates? 

i’ve just had a back charged bill with 6 years of empty property charge but the flat has been rented out fully in that time. I’ll advise Aberdeen City Council of this but they may ask for names and addresses as proof that I don’t feel able to supply as they’re confidential and also fall under the GDPR regulations. 

What do others do in this situation?

 Look forward to some guidance of possible please. 

Kindest regards

Roddy

[Mike-And-Jane0]

@Roddy4 In England if you use property as a short term rental then it should be registered for Business Rates. I would search/talk to the Valuations Office Agency (VOA) and see if they apply the same rules in Scotland to those in England. We loved all our apartments onto business rates and it was only hard because their phone lines shutdown over Covid - Once you talk to them they are very helpful.

[Roddy4]

Thank you @Mike-And-Jane0 

I wasn’t sure what the norm is so thanks for the note back. Much appreciated.

There’s a general lack of consistency across the Scottish local authorities for some reason and no real guidance. I’ve not found them to be particularly constructive to date but I’ll try again and hope I get someone helpful this time. 
Thanks again for the suggestion.

Kindest regards

Roddy

[Roddy4]

Hi @Mike-And-Jane0 

Just a related question if you wouldn't mind elaborating. Would you have to set up as a business formally via a Ltd company then or Sole Trader to qualify for business rates?

By looking at the Aberdeen City Council Small business rates application, it asks for the "Legal Structure" of the Ratepayer;- Sole Trader, Partnership, Ltd company, etc, as well as the Companies House Registration Number. 

Do properties have to be "owned" by the company to qualify?

Hope that you can offer your guidance if at all possible.

All the best

Roddy

[Mike-And-Jane0]

@Roddy4 I can only answer for England and how we operate:

My wife and I own the 3 holiday apartments that are all in the same building just as we own our house (so nothing special). We operate as self employed (sole trader?) and just fill in a self assessment tax form every tax year.

Under the English Furnished Holiday Let rules as long as we let each property for 105 days and they are available for 210 days then we are a FHL. This means we can nominate which owner gets whatever proportion of the profits we want. Also any profit (up to £40,000) can be paid into a pension.

Again in England from April 2023 we will need to let each property for 70 days to qualify for business rates - So a lower number than the FHL tax status demands.

Finally because all 3 properties are in the same building they are classed as one business so we get small business rates relief at 100% so pay no business rates at all.

All quite bizarre but we've paid enough tax over the years so are quite happy to benefit for once!

For a non holiday let (ie a rental property) Council tax would be paid, the rents would be apportioned 50% to me and 50% to Jane for tax   plus the rentals would not be pensionable. 

[Roddy4]

Hi @Mike-And-Jane0 

That's a really full and helpful response. Thank you very much indeed. I've contacted the Scottish Business Rates Assessor to request a valuation (They will allocate someone locally apparently) as it's a prerequisite of completing the Business Rates relief form. I do have a Ltd Company so I'm very careful about how I class business items and personal items (tax, expenses, etc) however it doesn't seem that Aberdeen City Council have a clear definition of a "Business" other than something that is not domestic (which isn't strictly correct as any business owner will tell you) 

Once I get the valuation, I'll include the valuation and details of the property and "Business" (sic) on that form and hopefully receive confirmation of 100% rates relief based upon the valuation. Not sure if I have to pay for commercial refuse collections though!

Will keep you updated

Again, thank you for taking the time to respond so comprehensively.

All the best

Roddy

[Mike-And-Jane0]

@Roddy4 be careful adding the holiday place into a business as it could drive you over the VAT threshold.

[Helen3]

Your post is a little confusing @Roddy4  Why would the council think your place is empty if you have been running an STR business from the property for the last six years.

Did you not register for business rates when you set up your STR business ???

[Roddy4]

@Helen3

Thanks for your reply. Apologies that my query confused you. No, it hadn’t been registered for Business rates, that was the gist of my question in the post. It’s a flat we had for many years that had been let out long term previously before being listed on AirBnB.

Aberdeen City Council and Scottish councils generally are not really supportive of short term rentals. Aberdeen City Council don’t have any guidance for AirBnB Rental properties so it’s hard to get definitive information. I was hoping to request some guidance from this community. 

Regards

Roddy

[Bhumika]

Hi @Roddy4 ,

Have you considered consulting with a professional accountant as well to help you understand the intricacies of tax-related regulations in your area?

Would like to hear more, if there are any developments related to your query and if you found an appropriate solution for it!

Can’t find what you’re searching for? start a conversation

[Sarai31]

Hello Roddy, I've been going through the same difficulties as yourself, our property is in the shire and I've only just heard from the Grampian Assessor today, so I've to evidence 70 days of let's, it can't be over 30 days, but I can't apply for last year ! So now I'm paying 200% council tax, very frustrating 

I'm not sure how you evidence there's been someone in your property, it would have been up to the tenants to pay the council tax.

Have you managed to sort out anything with council tax at all? I'm waiting to hear back from them. Any advice would be much appreciated 

[Helen3]

I'm a little confused @Roddy4 

Have you been letting out your property for six years but not paying any council tax or rates on it?

Yes you should factor any business expense in when deciding on your charge out rates such as business rates, electricity, insurance etc

Speak to Aberdeen council you can probably register for business rates.