FSB: Tax tweaks would devastate holiday lettings firms

Give us a Break: that's what the Federation of Small Businesses (FSB) is urging the government in light of proposals to change the tax rules on furnished holiday lettings.

Under the changes, eight in ten small firms in the holiday sector could go bust, the FSB says. And all because taking away their tax breaks is likely to force job losses, stifle trade and cost the tourism industry millions.

As the situation stands, furnished holiday lettings must be available to rent for at least 20 weeks of the year and rented out for ten. This gives the owners of self-catering properties a variety of tax breaks.

But the government's proposed changes would mean such firms are assessed as residential landlords rather than trading businesses. Over half of holiday lettings owners polled by the FSB said they'd be forced to lay off staff as a result and 81 per cent admitted their "financial viability" would be affected.

FSB national chairman John Wright commented: "Small firms know they are crucial to pulling the economy out of recession and on to the road to recovery, but they need the government to create a tax-friendly environment to do so."