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East Suffolk Lib Dems say "Sign the Petition to close the loophole on second homes

June 4, 2018 6:00 PM

Sign the Petition: -

To close the loophole that allows second home owners to avoid council tax and rates -

As reported in the EADT in April 11th, East Suffolk Liberal Democrats are campaigning against a loophole that allows second home owners to avoid paying council tax by registering as a business.

Eadt front page second Homes

In England, second home owners can avoid council tax by claiming to be a business if they say they are available for letting for 140 days a year - they do not have to actually let at all.

As their rateable value is below £12k, they also qualify for 100% small business rate relief - so pay nothing.

In Southwold, Lib Dem campaigner David Beavan, found 354 small businesses were claiming relief last year, of which 263 were second home holiday lets. All the second home businesses were claimed to have qualified for rate relief, amounting to £551,744.

David BeavanDavid added, the loose criteria required to register a holiday business and the ease of claiming rate relief could be costing the council around £500,000 a year.

"We are not against second home owners, many of whom elect to pay council tax, but we think it is unfair that people who can afford two homes are subsidised by people who can't afford one home. The rate relief is there to help struggling businesses, but the recent rate revaluation has put most small shops above the ceiling".

Most genuine businesses do not now qualify for small business rate relief because the latest revaluation has put them above the ceiling.. We believe that there is a loophole open to exploitation and local councils are granting rate relief and losing significant sums in council tax".

East Suffolk Party vice chair Jon James said: "Many second home owners pay council tax, contribute to community life and hold the property as part of their future retirement portfolio and intend to live in the area. We also recognise that the local tourist economy requires a high level of accommodation especially catering for families. We believe however that the system is not fair to many small businesses, who are not getting the rate relief or to the community who miss out on the council tax. The Finance Act 1988 needs an urgent review with regard to short term letting. In the short term, second homes should meet furnished holiday let criteria to qualify for business rates".

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