Tax penalties could cost South West £1.3bn

Brian Payne, Chief Executive, Bishop Flemming.
Brian Payne, Chief Executive, Bishop Flemming.

A Government refusal to abandon new tax-penalties for furnished holiday let properties could cost the South West £1.3 billion per year, and threaten accommodation for up to 4 million holiday-makers every season.

These are the findings of South West accountancy firm, Bishop Fleming, following a Treasury response to the firm’s lobbying against plans to end tax-rules for furnished holiday-let properties.

Representing hundreds of furnished holiday-let property businesses throughout the region, Bishop Fleming has mounted a campaign to challenge Government plans to end long-established tax treatments for these businesses.

According to Brian Payne, Bishop Fleming’s Chief Executive:

“Having written to the Chancellor, Alistair Darling, explaining how this tax reversal threatens a core element of this region’s tourism industry, we have now received a formulaic reply from one of his civil servants, underlining that the proposed tax penalty on owners of UK furnished holiday properties is designed to relieve the Government from having to offer similar tax-treatment to the owners of properties in the European Union.

“In a nutshell, this means that UK owners of furnished holiday-let properties – a crucial element of the accommodation for South West tourism – will now have to review the commercial viability of their business, so as to relieve the Government from extending their tax-benefits to UK owners of holiday properties elsewhere in Europe”, said Mr Payne.

Bishop Fleming provides a campaign platform on its website:—leisure/furnished-holiday-lets.aspx. This includes the firm’s letter to the Chancellor, and the Treasury reply.

“While, in better times, there was a trend for UK residents to buy European properties for furnished holiday-lets, the current recession and reversal of exchange-rates is already seeing a massive decline in this trend. So the Government is planning to penalise crucial providers of the South West’s holiday accommodation to avoid giving tax-benefits to a declining number of owners of holiday properties on the continent”, said Mr Payne.