Self-employed professional self-caterers, who derive most of their income from holiday lets do not qualify for any of the income assistance programmes being offered by the Government, because of a technicality on the Income Tax Return.At a time when the Government has (rightly) closed holiday letting down to stop the spread of Covid-19, business owners are reduced to zero income, and at the same time are also facing a barrage of guest requests for refunds, which many simply cannot meet.
Furnished Holiday Lettings occupy a special niche in the tax world, and – subject to meeting the FHL criteria https://www.gov.uk/government/
publications/furnished- holiday-lettings-hs253-self- assessment-helpsheet/hs253- furnished-holiday-lettings- 2018 – are regarded as trading businesses for tax purposes.
having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these
profits constitute more than half of your total taxable income
having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and
these profits constitute more than half of your average taxable income in the same period
- if you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.