As of April 6, the eligibility thresholds for Furnished Holiday Letting (FHL) Tax relief will increase.
In order to continue to be eligible for tax relief, owners of holiday lets in the UK and throughout the rest of the European Economic Area will need to prove that they do the following:
Let their property for an annual minimum of 15 weeks or 105 days
These thresholds have increased quite dramatically from an annual minimum of 10 weeks or 70 days and availability has been increased from 20 weeks or 140 days.
This additional five weeks a year has caused concern amongst holiday let owners who are daunted with the prospect of filling their properties. However, increased demand for properties means that by taking a few simple steps, holiday let owners should have nothing to worry about.
How to fill those extra five weeks:
Contact previous guests. Satisfied customers will be more than happy to write a review of their stay. They may be encouraged to come back if you offer them discounted rates for themselves or friends. Keep your database of past guests up to date and let them know any special offers or discounts you are offering.
Maximise your reach. Make sure your accommodation is listed on popular websites and in local tourist offices. It is also worth spending a little time on your personal website if applicable.
Invest in your marketing. Set a budget and understand what you need to spend to increase awareness of your accommodation. Decide when to offer and market seasonal discounts as these could be key to selling a few extra weeks.
Compare your marketing with your competitors. Look at facilities, quality of service, prices and your unique selling points (USPs). Consider a lick of paint, new photos of the property, a new set of booking enquiry response signatures and a new-look welcome hamper.
If pictures say a thousand words, a video says a million. Take one of your entire property and add it to all your online advertising. Make sure you share through your Facebook and Twitter accounts, upload to YouTube with a useful title such as ‘family friendly villa with pool in Marbella’ and ask your friends to share it too.
Although it may seem a lot like hard work – the financial benefits of filling your property for an additional five weeks can be quite significant. For example, a three-bedroomed cottage in Cornwall can earn £527 a week. With the increased thresholds, owners could be pocketing an extra £2,635 gross a year.
Owners should take advantage of the current growth in demand for holiday lets to ensure they meet the new FHL criteria and can claim the tax allowances, which include carrying any trade losses forward to future profitable years and a lucrative one-off capital allowances claim for what are known as “integral features” in the building.
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