Holiday Let Business Rates & Council Tax Guide for 2025
Whether you plan to use your second property for your own holidays or let it out and make a...
All self-catering holiday homes in the UK are subject to specific holiday let rules and regulations. As an owner, it’s imperative you know and understand these legal requirements when letting your holiday property.
These rules and regulations are in place not only to protect your guests but also you, your holiday let business and your property. While at first they may seem challenging and complicated, once you understand and put them into effect, making a success of your holiday let can be straightforward and rewarding.
Looking for something specific? Use our quick links below or read on for our comprehensive guide on holiday let rules and regulations.
Understanding the rules and regulations you need to follow when running a holiday let can be daunting. Luckily, the Coast & Country Cottages New Property Team are on hand to give you all the help and information you need to keep on top of these legal obligations.
For bespoke guidance, contact our team on 01548 843773, or complete the form at the bottom of this page.
A holiday let is defined as a property, such as a house, apartment, or cottage, that is rented out to tourists or travellers for short-term stays, typically for a few days to several weeks. Holiday lets are fully furnished and well-equipped.
When it comes to wrapping your head around holiday let rules and regulations this is the first step; knowing the difference between a long-term rental and a short-term holiday let. While the legislation between the two is similar, there are a few key differences:
It is this distinction which dictates the difference in legal requirements between the two types of letting.
In April 2025 , the Furnished Holiday Let (FHL) tax relief regime was abolished. As a result, the tax benefits associated with qualifying FHLs no longer apply, and FHLs are now taxed in the same way as long-term residential or commercial lets. You can read a full break down on the Government website.
However, there are a couple of things to bear in mind:
Read our blog on Furnished Holiday Let tax changes to learn more, including other tax benefits which still exist for holiday home owners.
As with any business, it is compulsory to keep accurate documentation and accounts that record income and expenditure for tax purposes. You must declare all earnings from your holiday let business when filing your annual return to HMRC.
Understanding the tax rules and allowances is important to ensure your finances are all correct and that you are legally compliant with the government tax system.
Using the services of a professional accountant or bookkeeper to manage your finances ensures that you are paying the correct tax as well as making the most of the allowances that the government provides.
Rates and taxes on a holiday let differ from a residential property.
You should be registered for business rates property tax rather than council tax if the following apply to your holiday let:
If your property does not meet these criteria and is classed as a second home, you will need to pay council tax. In the South Hams, second homes may be subject to a 100% surcharge, meaning you’ll have to pay double council tax on your property. For this reason, it’s advisable to meet the holiday let criteria and pay business rates on your property. For more information, visit the South Hams District Council website.
Visit the HMRC HS252 help guide for more information or read our blog on holiday let business rates and council tax.
Yes, holiday let insurance is important to protect your holiday let. This specialist form of cover is different to standard house insurance and many mortgage lenders require you to have this in place to finance your property.
Holiday let insurance is there to protect you and your holiday let, so it is vital to know what it should cover and that you have the right policy in place. Your holiday cottage should have adequate building and contents insurance. This is to cover against damage, accidents, and loss of earnings.
Public liability insurance for a holiday letting business is essential. Without it, you could potentially be exposing yourself legally and financially if your guests are injured.
Having public liability cover for at least £2 million is not a legal requirement, but is strongly recommended. At Coast & Country Cottages, all of our owners are required to have this level of public liability insurance. It enables you to safeguard yourself from legal hassles and compensation claims in the event someone slips, trips or has an accident.
As a conscientious owner, you will want to make certain that your guests enjoy a safe environment. Effective management of holiday let health and safety is important, not only for the security and well-being of you and your guests, but also to reduce your liability in the event of an accident.
For more details on the main health and safety requirements when letting out your holiday home read our Owner Property Safety Guidance.
As a holiday let business owner, you want to make sure your guests feel safe and comfortable during their stay. Carrying out a risk assessment is an essential part of your business as it highlights any potential issues, both inside and outside your holiday home. Actions taken from your risk assessment can include:
The Health and Safety Executive (HSE) is a UK government agency. They are responsible for the encouragement, regulation and enforcement of health, safety and welfare in order to safeguard individuals from potential risks. There is plenty of information available on their website to help you comply with practical health and safety responsibilities.
Read the HSE guidance on simple health and safety for practical resources and further information.
Holiday let fire safety is another important factor to consider. Understanding the risk that fire represents in your property enables you to consider and implement the right fire safety arrangements. In turn, these safety measures will protect the lives of you, your loved ones, guests, your property, and your holiday let business.
Practical fire safety management, with good processes and control measures, is essential for fire prevention. Should a fire occur, it can be controlled or contained effectively allowing people to escape to safety. Most fires are preventable and, if you can demonstrate that your fire safety management meets HSE fire safety recommendations, they are likely to be acceptable.
Fire safety guidance specifically for holiday lets was released by the Government in 2023. This involves carrying out fire risk assessments and carrying out actions to make your property safe. For detailed, digestible information on what the guidance involves, read our blog on holiday let fire regulations.
If your holiday let contains any gas appliances (either mains gas or LPG gas), it’s your legal obligation to ensure that all appliances are correctly installed and looked after. It is your responsibility to ensure that these appliances are checked annually by a certified Gas Safety Engineer and have the correct alarms fitted. You are also responsible for checking these appliances, their fittings, flues and chimneys are properly maintained.
As a holiday let owner, you must be aware of all current gas safety regulations and keep up with all gas safety checks. According to HSE, you must ensure gas appliances are checked annually and that a CP12 (landlord’s gas safety) certificate is provided for the property.
CP12 checks should only be conducted by a registered Gas Safe engineer who must provide you with a copy. One copy must be retained for your heating company and one should be displayed in the property for your guests to see.
The Gas Safety (Installation and Use) Regulations 1998 outlines the legal duties of self-catering accommodation providers in relation to gas appliances.
Where a property has a gas appliance, the HSE strongly recommends the use of carbon monoxide (CO) alarms as a useful precaution. This gives guests advanced warning of carbon monoxide in the property. Make sure to check the devices regularly and provide your guests with instructions on how to operate all gas appliances safely.
As a holiday let owner, you are required by law to ensure that all electrical appliances, circuits and fixed installations within your property are safe. All electrical supplies and wiring should be checked and any electrical appliances (washing machine, TVs, toasters, etc.) must be safe to use.
Faulty electrics can result in serious injury, death or fire. If you fail to maintain electrical installations and appliances you could be accountable and may invalidate your insurance.
While there is no legal requirement to obtain and renew an Electrical Safety Certificate, it is strongly recommended to show that you are complying with electrical safety requirements.
Although also not a legal requirement, it’s good practice to have electrical items in your holiday let PAT tested. Take a proactive approach and have a qualified electrician ensure the electrical items are safe.
For more information, read our guide on everything you need to know about electrical safety regulations for holiday lets.
Holiday home luxuries like hot tubs and swimming pools are often a big attraction for holidaymakers and can make a property more appealing. However, if you opt to include these added extras, it is important to make sure that they are well-maintained and safe to use.
A hot tub is a desirable addition to your holiday home but requires maintenance to ensure it doesn’t pose a health and safety risk. It is important to understand the guidance on operating and maintaining hot tubs to make them safe and enjoyable for guests.
The HSE guidance on spa pools offers advice on effective ways to safely manage and control systems through various testing, inspections, operation and maintenance. For detailed information, read our hot tub guide for holiday lets.
If you have a swimming pool at your holiday home, you should take all reasonable precautions to prevent injury and protect guests. Failure to do so could lead to a serious injury or incident, which will then raise the question as to whether your negligence was the cause of the accident.
To mitigate risks, use common sense and try to implement some of the following:
Here is some useful guidance from the HSE on managing health and safety in swimming pools.
You will need a TV licence if you provide a device in any short-stay accommodation where visitors can watch or stream live TV. This applies to any device including a TV, desktop computer, laptop, mobile phone, tablet, games console, digital box, or DVD player.
There is a special Hotel and Mobile Units TV Licence that costs £169.50 and will cover up to 15 accommodation units on a single site. If you have multiple holiday cottages in different locations, you’ll need a separate licence for each location. The TV Licensing website tells you more.
You will need a licence if:
You don’t need a TV Licence if guests are watching:
If you provide a DVD film library for your guests, you will need a DVD Concierge license. Providing films to paying guests without a licence is an infringement of copyright law (the Copyright, Designs and Patents Act 1988).
The main organisations which issue licences to businesses are Filmbank Media and MPLC. Prices will depend on the size of your accommodation and the length of the licence. If you don’t provide DVDs and guests bring their own, you won’t need a licence.
Depending on the size and type of your holiday let, you may also need a copyright licence to play music on a device.
The Copyright, Designs and Patents Act 1988 states that “any use of copyrighted music in public is possible only with the permission of the person who holds the copyright to the music being played”.
This means that you may need something called TheMusicLicence to avoid this. You can contact the PPL PRS for advice on your music usage requirements.
The good news is you probably won’t need a licence for music if you only own one holiday let with three bedrooms or less. According to Visit Britain, you will be exempt if:
Making sure you understand the relevant holiday let rules and regulations may not seem exciting, but it is important.
There are various sources of information that you can use to keep up to date on topics. Referring to the HMRC guidance for renting out a property and the HMRC guidance for private renting should always be your first point of reference.
Additional advice is available from the National Tourism Board, Visit England, who have published The Pink Book – a guide for guest accommodation providers that gives an overview of your legal obligations.
There’s also plenty of advice on running a holiday let, including tips on regulations, on the Coast & Country Cottages owner blog.
At Coast & Country Cottages, our local team is on hand to offer guidance on all holiday let rules and regulations for holiday homeowners.
We also offer our bespoke levels of property management service for holiday home owners in South Devon. To find out more about the levels of service we offer, read our blog on holiday home property management.
If you would like specific advice or to learn more about letting your holiday home, call our experienced team on 01548 843773 or complete the form below to request contact from our team, including a copy of our free Owner Guide.
If you’re looking to start a holiday letting business, the following blogs may be useful to you:
How to start a holiday let business
Are holiday lets a good investment?
Costs of running a holiday let
Please Note:
The information contained in this article was accurate at the time of writing, based on our research. Rules, criteria and regulations change all the time, so please contact our prospective new owner team if you’d like to hear how. Nothing in this article constitutes the giving of financial, tax or legal advice to you; please consult your own professional advisor (accountant, lawyer etc.) in this regard. If we have referred within the article to a third-party provider of unregulated holiday let mortgages, this is due to the fact that such mortgages aren’t currently regulated by the FCA.
As a helpful reminder, your home may be repossessed if you do not keep up repayments on a mortgage. Anything you decide to do in this particular area is one on which you should take your own professional advice on as we aren’t providing and can’t provide you with this.
As a holiday letting owner, you are responsible for compliance with health & safety laws, regulations and guidance, and for having the suitable insurances in place (not Sykes Holiday Cottages or its brands (Sykes)).
From time to time, Sykes shares information with you on the topic of health and safety and insurance. When it does so, it is not providing you with advice (legal, financial, tax or otherwise); please seek your own as you see fit. In addition, it is not making any representations or warranties about the information being complete or free from errors or inaccuracies. Sykes shall not be liable for any loss or damage arising under or in connection with your reliance on it.
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