Yesterday's Budget names our sector exactly once, in a VAT note, as "short-term rental accommodation". The phrase "short-term let" appears nowhere in it.
It still put 4 points on the tax rate on our income.
From 6 April 2027 property income gets its own rates. OOTLAR 1.2: "the property basic rate will be 24%, the property higher rate will be 44%, and the property additional rate will be 49%."
That is not 2 points. Budget 2025 announced 2 from April 2027, yesterday added 2 more from the same date, and the main rates stay at 20, 40 and 45. So on one day it goes 20 to 24, 40 to 44, 45 to 49. Since the furnished holiday lettings rules went in April 2025, that is our income.
These are England, Wales and Northern Ireland rates. OOTLAR 1.2 says Scotland and Wales have "the ability to set property income rates in line with their current Income Tax powers".
The costing reaches "unincorporated landlords", so company-held units sit outside it. And if your model carries substantial services and is genuinely a trade, your profits are non-property income and stay at 20, 40 and 45. That is a reading of the law, not a Budget statement.
Then the offset, which is in the costings rather than the Budget. Page 74: "Finance cost relief will continue to be aligned to the property basic rate." The statute confirms it: ITTOIA 2005 s274AA(5) now reads "property basic rate" from 2027-28. So relief on loan interest rises from 20% to 24% the same day the rate does. Model the rate without the relief and you overstate the hit.
On the tourist tax, the Fiscal Devolution Roadmap published alongside the Budget gives the levy seven paragraphs. One thing in them is new and not in our favour. September promised businesses advance notice of a levy's introduction "or any subsequent changes". The Roadmap now says "any subsequent significant changes to the design".
And be careful what we ask for. The rate cap and the night cap were both refused in September, and the sector was split on nights. What is still undecided is the record-keeping duty, how you apportion an inclusive package, and third-party sales. There is still no Bill.
Daily Message: the Budget named us once, taxed our income harder, and left the tourist tax with no rate, no Bill and no costing.
