Tax For Furnished Holiday Lets | Expert Advice
As of 6th April 2025, the Furnished Holiday Let tax scheme has ended. However, there are still some aspects...
by Janine de Lange / Owner
As an owner, it is essential that you are familiar with the most up-to-date and relevant holiday let legal requirements. These rules and regulations are there to protect you, your guests and your property.
There are a number of legal requirements for holiday lets that must be adhered to for the safe running of your business. Whilst some laws might be obvious, others are less so. We’ve provided some guidance and useful information to help owners understand the legal requirements of holiday letting.
Use the quick links below to read about a specific topic or carry on reading for our comprehensive guide on holiday let legal requirements:
Letting any property means that you are obliged to adhere to certain rules and regulations. However, there are different legal requirements for renting a property on a long-term basis than for a short-term period. So, it’s important to understand what is classed as a holiday let.
A holiday let is a self-catering property that is rented out to guests for short periods. This can be anything from a few days to a calendar month. A holiday let is usually furnished and decorated to a high standard and equipped with everything needed for a stay away from home.
A Furnished Holiday Let is a specific category of rental property that allows you as an owner certain tax advantages and benefits. To qualify as a Furnished Holiday Let (FHL), you will need to meet specific criteria and occupancy conditions.
Read our blog on furnished holiday lets to find out more.
The Spring 2024 Budget included an announcement that the Furnished Holiday Let tax regime would be removed from 1st April 2025.
There will likely be a period of transition from that date, and properties owned by limited companies won’t be affected by the changes. For specific details, visit the Government website.
Health and safety is a crucial element you need to consider when running a holiday let business. You have a duty of care to ensure you’re providing safe accommodation and doing all you can to minimise the risk of potential hazards.
Part of this process is to inspect your property regularly and conduct a safety assessment. It’s recommended practice to have an information folder for guests with details on any issues they need to be aware of, as well as instructions on how to safely use appliances and facilities.
Some health and safety actions you can take include:
As an owner, you should always follow the correct holiday let health and safety guidance and have any maintenance work done by competent professionals. By ensuring your holiday cottage is a safe environment, both you and your guests can relax in the knowledge that potential risks have been minimised.
To help you with a risk assessment and plan of action for your property, the Health and Safety Executive (HSE) has resources for businesses.
On the 1st October 2023, new fire safety guidance for holiday lets came into place. The guidance sets out what your responsibilities are, some practical advice on fire safety measures, and how to undertake a fire risk assessment.
For more detailed information, read our blog on or go to the Gov website.
Electrical safety is considered to be essential in a holiday cottage. Faulty electrics can lead to fires, injuries and even more serious consequences. As an owner, you are required by law to adhere to the necessary electrical safety regulations as set out in current standards as governed by the Electricity at Work Regulations (1989).
The legislation states that all electrical systems in a property must be maintained to avoid danger to all who use the premises.
Although it’s not a legal requirement to provide and renew your Electrical Safety Certificate, it is good practice to ensure that it is carried out. Your fire risk assessment will ask that you confirm this has been carried out.
We recommend you follow good practices to ensure the safety of your guests and make sure:
As the holiday let business owner you also have a responsibility to:
For more information on Holiday Let Electrical Safety Requirements, look at the Health and Safety Executive Guidance.
PAT stands for Portable Appliance Testing. It checks to see if the electrical appliances with a plug are safe and up to standard. Whilst it is not a legal requirement in England and Wales, we recommend getting it done for peace of mind and to keep you guests safe.
PAT Testing is an effective way of identifying faulty or defective appliances that could pose a threat to your guests and property. A PAT test should be carried out by a qualified electrician on an annual basis and each item should be labelled as a pass or fail as well as the date the test was carried out.
We recommend you keep a record of each inspection to show that all procedures are being followed. If you work with a holiday letting agent like Cornish Cottage Holidays, we will often request a record of your annual PAT test documents as a way of knowing everything is up-to-date.
You are responsible for the safety of your guests and are required, by law, to comply with the relevant gas regulations. Under the Gas Safety (Installation and Use) Regulations 1998, all gas appliances, fittings, chimneys and flues should be maintained and be in a safe condition.
You must obtain a gas safety record (also known as a CP12 certificate) by maintaining and servicing gas appliances. Always use a Gas Safe registered engineer for all pipe work, gas appliances, flues and LPG installed at your property.
For more information on , check out the HSE website.
Another way to keep your property safe is by installing carbon monoxide alarms to identify the presence of this harmful gas.
Fitting audible carbon monoxide alarms will alert your guests if this harmful gas is detected at dangerous levels. These should be installed to the manufacturer’s instructions and there should be a minimum of one per room where gas or oil is burnt, there is a flue running through it, or a wood burner or open fire is installed.
Kitchens are another place where they should be installed, if you have a gas appliance. For more information, check out the Q&A booklet for landlords on the GOV website.
Holiday cottages with hot tubs and swimming pools are more popular than ever, often increasing bookings and income. But both can become a risk to guests if they aren’t maintained and adequate safety measures aren’t put in place.
As with other potential hazards in your holiday let, you should undertake a thorough risk assessment of your swimming pool or hot tub. Make sure you understand how to operate and maintain these for your guests.
Follow the HSE swimming pool health and safety guidelines for additional tips to keep your property safe for guests.
The Health & Safety Executive has published guidance on hot tub safety for anyone responsible for managing one as part of a business activity. To comply with legal requirements as well as limiting the risk of infection, you will need to ensure that the hot tub you purchase is HSG282 Compliant.
You will need a TV license for your property if you have a device where guests can watch or stream live TV. Holiday lets require a special type of TV license called a Hotel & Mobile Units Television License. Visit the TV licensing website for more information.
A single TV license costing £169.50 will cover up to 15 accommodation units on an individual site. If you have more than one holiday cottage in different locations, you’ll need a separate license for each property.
If you provide a selection of DVD’s for your guests to use, you will also need a license. Providing films to paying guests without a license is an infringement of copyright law (the Copyright, Designs and Patents Act 1988).
Letting out your holiday home to guests means you are responsible for ensuring that not only is your property protected, but your guests are taken care of should anything happen.
A standard home insurance policy is not sufficient to cover your holiday let. You’ll need to get a specialist policy that will cover a multitude of elements that a regular home insurance won’t.
Policies typically cover accidental damage, loss of rent as well as periods when the property is unoccupied. Although not a legal requirement, having public liability insurance cover of £2 million per event, is also an advisable requirement for running a holiday let business. At Cornish Cottage Holidays, we require owners to have this level of public liability insurance cover before joining us.
Many owners consider providing complimentary drinks in their welcome pack. As first impressions go, it seems relatively simple to welcome guests to your property by providing a bottle of wine or locally brewed beer. But many owners may not be aware of the alcohol licensing laws when providing alcohol in a welcome pack.
The 2003 Licensing Act states that you must have both a Personal License and a Premises License in order to provide alcohol. This is even the case if you have provided it as a gift and no monetary transaction takes place, as it’s seen as part of the cost of the rental, rather than free of charge.
Read our blog on alcohol licensing in your holiday home for more information on how to ensure you’re aware of the relevant legislation.
Holiday lets require a specialist mortgage. A traditional residential mortgage will not be suitable. A holiday let mortgage is specifically designed for an owner to borrow money to buy a property that will be both for personal use, and ashort-term accommodation for holiday guests.
Understanding the difference between the types of mortgages available to you as a holiday home owner is imperative. There are implications involved with offsetting costs against profit, as well as far more stringent assessment criteria if applying for a buy-to-let.
Read our guide on financing a holiday home to find out more about holiday let mortgages.
Self-catering properties will be liable for paying either council tax or business rates. Whether you pay business rates on your holiday let is dependent on how many days your property is available to let and occupied each year.
If you do not qualify to pay business rates, you will need to pay council tax until the property meets the eligibility rules.
If you want to know more about how much tax you would need to pay in Cornwall, visit the Cornwall Council website.
Purchasing any property that is in addition to your main residence will have an additional Stamp Duty charge known as Higher Rates on Additional Dwellings tax (HRAD).
This form of tax starts at 5% and rises in bands, climbing to 17% for the most expensive properties. Visit the HMRC website for more details.
If your holiday home qualifies as a Furnished Holiday Let, it is classed as a business.
While there is no legal requirement to have a business bank account for your holiday let, it is essential to keep an accurate account of income and expenditure relating to your business. The easiest way to do this is to have a business bank account.
Having a business bank account makes it easier to track income and expenses, all of which must be declared to Inland Revenue (HMRC). Keeping your holiday let finances separate, in a designated account, will make it easier to manage.
Read our guide to holiday let costs to get a better idea of what expenses you should expect to budget for.
Within the UK and Ireland, there are different rules to follow regarding new and refurbishment works. Make sure that your builder is aware of the current rules and regulations.
Planning permission is generally not required when buying and running an existing holiday let. It may however be applicable if you’re starting a new business, converting or extending your property.
If any of these apply, you may need to submit a ‘change of use’ application for your property. Always contact your local planning and building control departments prior to carrying out any structural changes within your property.
For more information, read the official government guide to planning permission or visit the planning portal to find out whether you’ll need an application.
Finding the right holiday letting agency in Cornwall for expert advice and support can make all the difference with achieving holiday let success. With over 800 self-catering cottages in locations throughout Cornwall, we at Cornish Cottage Holidays have the expertise and industry know how to help you run your holiday letting business.
We want letting your holiday home to be as enjoyable and effortless as possible for you, so we’ve created some helpful blogs to answer any queries that you may have. Simply visit our owner advice page to find out more.
If you’d like to learn more about letting your holiday home, complete the form below to request contact from our team. You’ll also receive a copy of our FREE Owner Guide.
* The information contained in this article was accurate at the time of writing, based on our research.
As a holiday letting owner you are responsible for compliance with health & safety laws, regulations and guidance, and for having suitable insurances in place (not Sykes Holiday Cottages or its brands (Sykes). From time to time, Sykes shares information with you on the topic of health and safety and insurance. When it does so, it is not providing you with advice (legal, financial, tax or otherwise); please seek your own as you see fit. In addition, it is not making any representations or warranties about the information being complete or free from errors or inaccuracies. Sykes shall not be liable for any loss or damage arising under or in connection with your reliance on it.
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by Janine de Lange / Owner
I’ve had the privilege of living in the beautiful South West since 2010, and in my opinion there’s no better place in the worl...
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