Andrew Sinclair is a partner at Ayr-based Sinclair Scott Chartered Accountants. He points out that businesses which let out furnished holiday properties currently enjoy the same treatment as a normal trade for taxation purposes. Loss relief, business assets, rollover, business property relief, capital expenditure and earnings rules are the same as for any other small business.
However, due to a suggestion that the current legislation may not be compliant with European Law, the proposal in the Budget is to end rules for furnished holiday lets from 2010. These businesses will be treated as if they are operating ordinary property rentals, which will have a significant negative financial impact on the sector as normal business trading benefits will no longer be available.
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Andrew Sinclair, who is also a member of the Association of Scotland's Self-Caterers, said: "This is fundamentally unfair, as many furnished holiday lets are run very much as 'hands-on' businesses, and in that respect do not differ from bed and breakfast or hotel accommodation."
David Smythe, chairman of the Association of Scotland’s Self-Caterers (ASSC), added: "In a time when the Government should be doing more to promote and assist the indigenous tourism industry, these changes are extremely unwelcome. This proposal was not consulted on, and seems to be applying a sledgehammer to crack a nut. We will be lobbying hard to have this proposed change amended."
Andrew Sinclair has written a paper about the Budget changes affecting furnished holiday property owners. Copies can be obtained from Sinclair Scott Chartered Accountants, telephone 01292 288999 or e-mail: ca@sinclairscott.com.
(GK/JM)
