Can you be charged business rates in the uk for Airbnb lets?

[Jill174]

We have been doing Airbnb for 12 months and have just received an assessment for business rateable value  from the council for £1800 for the year! We only rent out one bedroom and this is a huge chunk our of our profit. Can they do this?

[Jeff158]

Hi Jill

On letting rooms in your home you become a B&B for business rates purposes and should inform the council when opening.

It depends on the council, most don't charge business rates if the guests have access to less than 50% of your home and you have no more than 3 letting rooms. I should imagine they just want you to get in touch so they have a record of who's providing accommodation in the area, how many rooms you let and making sure you are meeting hygiene/ health & safety minimums.

[Rachael61]

Hello, we have recently contacted regarding business rates- I just wondered what your outcome was? 

[Frances2]

Hello, I am also interested to know what the outcome is! I am having endless letters from the council about this. My turnover is tiny. 

[David126]

Easiest thing to do would be to call the Council and ask, say you are thinking of doing short term rentals and wanted to know what the rules are.

Obviously Hotels are charged Business Rates, I assume full time B&B's are.

[John1122]

HI what was the outcome Jill?  I think if your income is 12000 rent or below per year you're exempt.....?  Not sure but cleaning charges on bookings may be taken off your figure rent figure....??  Do you know?

[Sean377]

This explains all! 

https://www.thesapodcast.com/18-business-rates/

Generally, Business Rates will be lower than Council Tax and in most AirBnB businesses are zero!  This is because "small business rates relief" is usually allowable if you qualify as an FHL (Furnished Holiday Let). If the relief applies and the "Rateable Value" is less than £15,000, the business is "zero rated".   Most AirBnB properties have a Rateable Value far less than this. For example, a flat in central  Manchester with accommodation for 6  is  only £3000 and so Business Rates will be zero.  The same flat in central London will probably exceed the threshold, but even then, there is tapered relief between £18,000 and £15000 from 0-100%.  My 3 bed, 6 person cottage in Anglesey is £2125 and it is zero rated.  I pay no Council Tax and no Business Rates. 

If the business does not qualify for small business relief, then the Rateable Value is multiplied by 49.3p to calculate the amount due per annum.  If it does qualify as a small business and the RV is above £15000, the rate is 48p (2018-19).

To get your Rateable Value, you have to apply to the Valuation Office Agency  

[Debs-and-David0]

Sean!

Many thanks for taking the time to explain this. It has been extremely helpful to me.

Merci

[Sean377]

Delighted to be of assistance

[Tom759]

Hi Sean,

Thanks for the above....do you know if you have to let out for a minimum number of days/weeks to qualify for small business rate relief?

Thanks in advance.

Margaret Woolliss.

[Sean377]

I think you have to qualify as an FHL (Furnished Holiday Let) business;

• It must be available for rent for at least 210 days in a year.
• It must let for at least 105 days in a year.
• It should not be occupied by long-term tenants for more than 155 days in a year.
• It must be furnished.

There are lots of other advantages to becoming an FHL.  Mortgage interest is claimable at 100%, you can allocate all the profits to a low earning partner and can claim huge capital allowances (see STAX Ltd) .  I got £70k of capital allowances on my cottage in Anglesey, so I wont pay any tax for years, until my profits have used this up!  If you have other FHL's, you can roll them all up into the same business.  

[Bea2357]

Hi Sean,

Is it possible to have a Furnished Holiday Let  house under a company name? How do I register my house to be a Furnished holiday let house? 

Thanks in advance,

Sergio 

[Charlotte487]

Hi Sean... I just wondered if you know what the situation was if your Air b&B was rated with Business Rates with regard to Water - as the Water Company rate the property based on its ratable value via the local council. I have been told if I move my Air b&B flat to Business Rates my water then will need to be supplied by a Business Water Supplier - am wondering if this then makes the whole process not worth doing? Will I just be paying loads for water - so wodul have been cheaper to pay teh council tax in the first place...

Wondered if anyone had knew about this?

Many Thanks...

[Clive67]

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@Charlotte487 wrote:

Hi Sean... I just wondered if you know what the situation was if your Air b&B was rated with Business Rates with regard to Water - as the Water Company rate the property based on its ratable value via the local council. I have been told if I move my Air b&B flat to Business Rates my water then will need to be supplied by a Business Water Supplier - am wondering if this then makes the whole process not worth doing? Will I just be paying loads for water - so wodul have been cheaper to pay teh council tax in the first place...

Wondered if anyone had knew about this?

Many Thanks...

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Hi Charlotte,

Did you find any information about this? My AIRBNB is currently on Council Business Rate and the local water company are stating that I need to move to business rates for supply and sewerage. I cannot find anybody else in the area that has been presented with this advice.

Regards

Clive  

[Sean377]

I am not aware of this, but you are probably right?  I have not changed my water supply arrangements on either of my two FHLs since registering for business rates.  Maybe they will catch up with me!