Expats renting out self-catering holiday lets in England should automatically qualify for business rate relief and bounce-back loans under the UK’s coronavirus financial rescue package.
Chancellor Rishi Sunak has already announced hospitality businesses will not have to pay business rates for the 2020-21 tax year.
Holiday lets are eligible for the grant which is applied by local councils – and if they do not offer the grant, expats should contact the council for the area where the property is located.
Owners must prove their homes are run as a business, which should be easy if they are taxed as holiday lets under HM Revenue & Customs rules.
Business owners can be individuals, partnerships or companies, and they can be based in the UK or overseas.
Holiday lets in England
To qualify, a property must be available to rent for 140 days a year.
These lettings must not be time allotted to the owners, family or friends.
Sunak has not applied any exception to taxpayers who do not live in the UK.
These businesses can also claim £10,000 from the Retail, Hospitality and Leisure Grant (RHLG).
In England, 55,000 holiday lets are estimated as eligible for rates relief and the RHLG grant.
Holiday lets in Wales
In Wales, a property is considered ‘non-domestic’ if:
- The home is rented out as self-catering accommodation for short periods totalling 140 days or more in a tax year
- The applicant pays the rates rather than rents the property
- In the year prior to assessment the home has been available to let as self-catering accommodation for short periods adding up to at least 140 days
- Actual lets have amounted to at least 70 days during that period
- Businesses letting several self-catering properties at the same location nearby can average the number of lettings days of the portfolio to meet the 70-day test where they are let by the same or connected businesses
Holiday lets in Scotland
In Scotland, self-catering holiday lets that contributed more than a third of business ratepayer’s income that were let out for 140 days or more in the 2019-20 tax year qualify for rates relief and a one-off business grant of £25,000.
Business ‘bounce-back’ loans
Holiday let owners can also apply for ‘bounce-back’ loans – the government scheme that underwrites 100% of interest payments for the first year the loan runs.
The loan is guaranteed by the taxpayer and covers any borrowing fees and interest due.
The scheme offers small businesses cash to tide them over lost trade due to the coronavirus crisis.
Borrowers can ask for between £2,000 and £50,000, which should be available within days.
Property owners can self-certify why they need the money through a short, online application.
Applications open on May 4.
Again, no restrictions stop expats making a loan application.
The Chancellor said: “Our smallest businesses are the backbone of our economy and play a vital role in their communities. This new rapid loan scheme will help ensure they get the finance they need quickly to help survive this crisis.
“This is in addition to business grants, tax deferrals, and the job retention scheme, which are already helping to support hundreds of thousands of small businesses.”
Bounce-back loans are considered instead of rather than in addition to the Coronavirus Business Interruption Loan Scheme (CBILS).
CBILS also applies to expats with holiday let businesses, but the application process is more complicated.
Loan values start at £25,000.
Static caravans and houseboats count as holiday lets
Under tax law, renting out static caravans and house boats are considered holiday lets, providing they pass the same occupation tests as a standard-built home, and should qualify for rates relief and grants.
Furlough payroll for staff
Holiday letting businesses with staff on a payroll are also eligible for the 80% payroll furlough cash under the Coronavirus Job Retention Scheme.
Holiday lets in Europe
Finally, government guidance is not clear if UK business owners renting out furnished holiday lets in a European Economic Area (EEA) country impacted by coronavirus can access any of the financial lifeline packages.
UK tax rules define these properties are part of a furnished holiday letting business.
