A new resumé on the tax implications of owning holiday accommodation in the UK has been published by Saffery. This coincides with increasing reporting in the media that the popularity of staycations brought about by the Coronavirus pandemic looks set to continue, with nervousness around foreign holidays prompted by reported issues at airports, residual worries about travel abroad and Covid-19, and a host of existing and emerging opportunities across the UK.
Investors Chronicle reported recently that the Sykes Holiday Cottages Annual Staycation Index, published last month, estimated that at least 77% of UK residents are planning at least one staycation this year. It also reported that more than half are spending their main summer break in the UK, pouring an extra £15.5 billion into the UK economy, with the estimated average spend on a domestic holiday being £822.
The Duchy of Cornwall recently announced plans to build a further 10 holiday cottages in the next 18 months to cope with soaring demand.
Saffery’ latest article considers the various tax implications for holiday accommodation providers offering furnished holiday lets and ‘glamping’, including capital allowances, capital gains tax, rollover relief, inheritance tax, national insurance and VAT.
“This comprehensive overview by my colleague Collette Parry, in our Bournemouth office, clearly demonstrates how complex the tax implications and related considerations can be for all types of holiday accommodation businesses, and how they are very much dependent on individual circumstances.
“For those landowners and farmers across the rural sector who may be considering diversification into holiday accommodation, this will be helpful information – as well as a useful aide memoire to those already operating in the tourism business.”