Southwest leads fight against holiday let plans

A group of companies in southwest England has launched a campaign against government plans to scrap tax incentives on furnished holiday lets.

The Combined Association of Holiday Home Agencies wants ministers to consult with the industry before it removes the tax allowances, as announced in April’s Budget.

Furnished Holiday Lettings rules, introduced in 1984, currently allow owners of holiday lets, including farmers who have diversified, to enjoy the same tax advantages as those running other tourism businesses. But last month the Chancellor unveiled plans to abolish these rules with effect from 6 April 2010.

“These proposals have caused great alarm in our industry because they were announced without any consultation,” CAHHA chairman Charles Edward-Collins said. “We are still no clearer how they would be implemented nor how the government would deal with the inevitable grey areas that would result from their repeal.”

The UK Tourism Survey estimated the southwest had 62,000 furnished holiday lets last year, accounting for £574m, or 16% of all visitor spending in the region.

“At the very least we would like to see any legislative changes published in draft at the time of the pre-Budget Report in the autumn so there is time for owners of furnished letting accommodation to assess the impact before any new rules take effect,” tax expert John Endacott added.