Non Domestic rates

Marpep

Hi All

18 months ago I purchased a cottage in Wales as an investment, and rent it out as a holiday let, which just about covers its costs.

Recently I have recieved a letter from the Valuation Officer asking questions to assess "Non Domestic Rates".

Questions such as:

How many beds are there in the property?
Are the bedrooms on suite?
When did the property become available to rent for more than 140 days per year?

Can anybody advise me with this, as I did not take this cost into account with my original budget and will probably make a loss, should I have to pay more. (Currently paying council tax)

any advice would be great.

Many thanks
In advance

PasturesNew

If it is a business, then it is highly likely you should have been paying business rates.

The decider is a cut off point of 140 days' letting.

http://www.castlemorpeth.gov.uk/services/advice_and_benefits/business_rates/Pages/default.aspx
and
(Wales link) http://www.tourismalliance.org.uk/news_article.php?newsHeadingID=76&page=front

The reason is that self contained properties are normally liable for council tax if they are empty, or if they are occupied by an owner or by a tenant who uses it as their sole or main residence. However, if the owners of these properties can satisfy the Valuation Office Agency that they are available for letting commercially with a view to making a profit to be let on a self catering basis for short periods for over 140 days per year (even though they may not actually be let for this number of days), they become liable for non domestic rates instead of council tax. This can result in them contributing less towards local taxation than if they were paying council tax, and it can effectively subsidize second home owners who may occupy their property for part or none of the year. It also discourages year round occupation of these properties, which can have adverse effects, particularly in smaller communities, where there is a shortage of affordable housing, and the sustainability of local communities can be undermined as empty properties result in fewer people to support local businesses and services.”

If you offer it for rent more than 140 days per year, you'd pay business rates.
If you offer it for rent less than 140 days per year, you'd pay council tax.

The thing here is offering it, not to be confused with how many bookings you actually took.

Marpep

many thanks for your help, this certainly makes things clearer. Its now a case of which way to move forward.