Shadow Chancellor George Osborne recently pledged to reverse Alistair Darling’s decision to abolish tax breaks for furnished holiday cottages should the Conservatives win the next general election. The decision is part of a major tourist-led package that could be worth over £1.1bn to the South West tourism.
In a speech centered on the Tories’ approach to tourism, Mr. Osborne claimed that increasing the number of Britons using holiday cottages from 38 to 50% would provide an extra £6.5bn to the UK economy. Expert tax advice provided to the Shadow Treasury has apparently revealed the Tories can reverse Mr Darling’s plans in a way that is ‘fiscally neutral.’
In April last year, Darling unveiled plans to scrap valuable tax incentives for home owners renting our their properties to tourists. The plans gave owners relief on income tax, capital gains tax, inheritance tax and pension contributions.
The law changes on April 1st, yet there has been significant backlash from the holiday cottage community that believes scrapping the plans will turn respectable businesses into amateurs. The Treasury has blamed European law, which prevents tax relief being given to owners of holiday homes in the UK but not to Britons renting properties abroad.
The Tories’ decision should be welcome news to holiday cottage owners and Britons interested in taking more ‘staycations’ – if you’d like to find out more take a look at our holiday cottages in Ireland for some delightful inspiration direct from the Emerald Isle!