As most property owners are aware, new rules are set to be introduced as of 1 April 2023 which will determine whether you can continue to claim small business rates relief and, in most cases, not pay rates or council tax. However, there is a trap for the unprepared which Alun Evans, a Partner at our Haverfordwest office, explains below.
The Welsh Government guidance states:
Rules from 1 April 2023
If your property is in Wales, it will be rated as a self-catering property and valued for business rates if it’s both:
- available to let for short periods for at least 252 days in total over the current and previous tax years
- let for at least 182 days in the last 12 months
This is confusing as on the one hand it states the new rule starts on 1 April 2023 but on the other says they will look back 12 months.
So, when do the new rules start?
I am grateful to Pembrokeshire County Council for directing me to the Valuation Office Agency guidance which clarifies the start date below:
The new eligibility rules will take effect from 1 April 2023. However, we will look at Information about a property’s letting during the 2022/23 operating year to assess whether the new eligibility rules have been met.
Will the new eligibility rules apply retrospectively?
If a property does not meet the new eligibility rules for the 2022/23 operating year, the property will be moved out of Business Rates and into the Council Tax Valuation list from 1 April 2023.
In other words, the new rules started on 1 April 2022!
If you have not already met the 182-day test, then you have until 31 March 2022 to increase bookings. As Easter falls on 7 April 2023 the Christmas and New Year bookings will be crucial.
Get in touch…
We expect the vast majority of furnished holiday lets to fail the 182-day test and if you wish to discuss your circumstances further, please phone or email your usual contact at Bevan Buckland LLP.
