Air b and b as a business

Liberal

Hi. I am considering buying what would be a 2nd home. I would hope to use it as an air b and b. If I register it as a business would I be able to claim exemption from the double council tax due as a 2nd home? If so why doesn't everyone with a second home do that?

elsien

You could but it has to be rented out of a specific amount of time every year and you might  have to pay business rates instead.
Which option  is best to go for depends, on the individual property, your intentions in how you use it,  and various other individual factors. 

anselld

Liberal said:

Hi. I am considering buying what would be a 2nd home. I would hope to use it as an air b and b. If I register it as a business would I be able to claim exemption from the double council tax due as a 2nd home? If so why doesn't everyone with a second home do that?

Once you meet the criteria, yes you can apply to be listed for business rates and delisted from Council Tax.  If it is a modest sized property you will also apply for small business rate relief which as thing stand will reduce your tax to zero.

https://www.gov.uk/guidance/apply-for-business-rates-for-a-self-catering-property-in-england

sheramber

Liberal said:

Hi. I am considering buying what would be a 2nd home. I would hope to use it as an air b and b. If I register it as a business would I be able to claim exemption from the double council tax due as a 2nd home? If so why doesn't everyone with a second home do that?

Do you want the admin and hassle of operating a business.

Complying with all the regulations.

Arranging cleaning between lets. 
 

Does your local  council  have any restrictions on short term lets?. 

Or are intending registering it as a business but not operating it as a business? 

theartfullodger

Air b and b as a business - it's  a very successful business making money from punters to offer their properties to them to make money out of. 

poseidon1

Liberal said:

Hi. I am considering buying what would be a 2nd home. I would hope to use it as an air b and b. If I register it as a business would I be able to claim exemption from the double council tax due as a 2nd home? If so why doesn't everyone with a second home do that?

I assume the other attraction of business rating compared to 2nd home council tax, is the possibility of Small Business Rate Relief which could ( under certain conditions) bring the rate bill down to zero as set out below- 

https://www.helpfulholidays.co.uk/blog/council-tax-for-holiday-cottages/#:~:text=When to pay council tax,to charge the maximum amount.

However you are no doubt also aware that the highly beneficial income tax treatment previously accorded to furnished holiday let businesses have completely disappeared, and they are  now taxed exactly like shorthold buy to let letting businesses with all their associated tax disadvantages (Section 24 restriction on mortgage interest payments being the most prominent one).

mlz1413

If you register as a business then I presume you will need to insure the house as a business.

Pay for business waste?

Have utilities in the business name.

Also would you pay a higher mortgage rate on a B2L mortgage for a business?  Or would that only affect Limited companies? 

elmer

If you dont meet the number of days per year let criteria your air b n b will be added back to the Council tax roll retrospectively and the 200% charge added for the whole of that year
As its a previous year there is then no ability to appeal so please ensure you are able to let it for the required amount of days before you remove it from the council tax roll

Liberal

Thank you for all comments.
Very informative. 

BungalowBel

We thought of doing the same, but after having read up a bit on it, I don't think we will bother.