Big changes to taxation of furnished holiday lets

The Chancellor also announced the abolition of the Furnished Holiday Lettings (FHL) tax regime – the significant tax advantages over standard long-term lets have now gone. 

This is because, from a taxation point of view, you are no longer running a business. From April 2025, in the eyes of HM Revenue & Customs, despite the work involved, furnished holiday lets are treated as passive investments and taxed as such. The regime is being brought into line with standard buy to lets, which themselves have suffered from tax increases recently. 

The new rules will not be finalised until they appear in the Finance Act, but it looks likely they will be approved. 

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