The Tourism Alliance is rallying against the swift move to end tax relief on holiday lets, as announced in the Budget, which could reshape the sector.
- This push is backed by the Professional Association of Self Caterers (PASC), who are mobilising a campaign to delay changes until a national registration scheme is in place.
- Concerns arise as the shift could lower the supply of holiday accommodations in major tourist destinations, impacting the wider tourism industry.
- Government insists the abolition addresses property availability for locals, but industry voices contest the fairness of targeting holiday let owners.
- Current measures suggest councils will need planning approval for new short-term lets, with existing setups reclassified automatically.
The Tourism Alliance has joined forces with the Professional Association of Self Caterers (PASC) to challenge the government’s urgent removal of tax relief on holiday lets. The campaign seeks a postponement of these changes until a comprehensive national registration scheme is operational.
PASC has initiated a petition and is coordinating mass emails to MPs, strengthening their stance within the 75-member strong Tourism Alliance which includes prominent groups like Abta and UKHospitality. The core argument is that the abolition could significantly affect both accommodation providers and the broader tourism sector, particularly in key holiday destinations.
The government’s position, backed by Chancellor Jeremy Hunt, hinges on the argument that the existing tax regime restricts the availability of long-term rental properties for local residents. This policy decision, noted in the March 6 budget, appears to be a reaction to continued advocacy by MPs from regions including St Austell and Newquay, and North Devon.
However, this stance is strongly opposed by industry figures such as Ben Edgar-Spier of Sykes Holiday Cottages, who claims, “Holiday let owners have been unfairly scapegoated”. He maintains that short-term rentals are vital to local economies and argues against penalising owners instead of tackling the issue of idle second homes contributing nothing to the economy.
The government has rolled out new regulations effective from this summer, giving councils authority to require planning approval for properties transitioning into short-term lets, although established rentals will automatically be reclassified. Airbnb supports these new measures, highlighting the clarity it brings for hosts and local governance.
The rise in short-term lets by 40% from 2018 to 2021, combined with the fact that the UK stands as the fourth-largest market in Europe for short-term rentals, underscores the growing significance of this sector. The Office for National Statistics highlighted that a significant proportion, about 64% of bookings, came from domestic visitors.
The government has promised more details on the forthcoming mandatory registration scheme later in the year, a move that received broad support during consultations. Meanwhile, there are mixed responses concerning the reclassification of existing short-term lets, with groups like Generation Rent expressing apprehension over these allowances.
The ongoing debate reflects the complexity of balancing tourism growth with local housing needs and underscores the need for strategic planning.
