Suffolk second home campaigners warn tax concerns must not be ‘kicked into long grass’
PUBLISHED: 08:39 01 July 2018 | UPDATED: 08:39 01 July 2018
Suffolk campaigners seeking to ensure second home owners pay tax are concerned Government ministers are “trying to kick this issue into the long grass”.
Southwold’s Liberal Democrat party branch has been highlighting a “loophole” which allows second home owners to register the properties as holiday-lets, claim small business rate relief and pay no tax.
To qualify, the property needs only to be “available to let” for 140 days a year – which could mean as little as a window advert.
It has led to concerns local councils could be missing out on hundreds of thousands of pounds of tax every year - and national calls for the loophole to be closed.
Campaigner David Beavan was “elated” earlier this month when a debate in the Upper House saw peers including Lord Deben and Lord Shipley back plans to reform, The peers suggested the system should be brought in line with Wales where holiday lets must actually be let for a minimum of 70 days a year.
However, a debate last week in the House of Commons, failed to get the same support.
Three Cornish Conservative MPs had called on the Government to stop second homes claiming business rate relief.
St Ives MP Derek Thomas said news that frontline services were being deprived of income through a legal loophole was “like a red rag to a bull”.
However, Rishi Sunak, the parliamentary under-secretary of state for housing, communities and local government, said that while he took tax avoidance “extremely seriously” he also felt the current rule was “widely understood”. Mr Sunak said it provided a “clear method of decided whether a property should be liable for council tax or business rates”.
Mr Sunak said he had discussed the matter with several colleagues, including Suffolk Coastal MP Therese Coffey, and he would continue to examine the issue of second home taxation.
Mr Beavan was concerned the issue had been ignored. “This rule does not provide ‘a clear method’ at all,” he said. “I am worried that they are trying to kick this issue into the long grass.”
Mr Beavan said that as people who claim unemployment benefit must actively prove they are seeking work, those who claim rate relief for holiday lets should also prove they are letting the property. “The government just takes their word for it,” he added.