What changed in April 2025
The special tax regime for furnished holiday lets was abolished from April 2025. Holiday lets are now taxed much like any other rental property. In practice that means:
- Mortgage interest only gets basic-rate tax relief, rather than being deducted in full
- Capital allowances can no longer be claimed on new furniture and equipment, though replacing furniture can still be claimed
- Holiday let profits no longer count as earnings for pension contributions
- Some capital gains tax reliefs on selling no longer apply
If you hadn’t reviewed your holiday let since the change, it’s worth sitting down with us.
Making Tax Digital
Rental income counts towards the Making Tax Digital limit, added to any self-employed income. If the total before costs is over £50,000, quarterly digital updates started in April 2026. From April 2027 the limit drops to £30,000. We’ll set you up and handle the updates.
What you can still claim
Cleaning, laundry, booking site commission, insurance, repairs, utilities, council tax or business rates, licence fees and our fees can all usually be claimed. We go through it with you each year.
What’s included
- Self Assessment tax returns for holiday let income
- Accounts for lets run as a partnership or limited company
- Making Tax Digital set-up and quarterly updates
- Advice on owning jointly, through a company, or selling
- Xero set up with your booking platform payouts
Common questions
Can I still claim mortgage interest on my holiday let?
You get tax relief at the basic rate on mortgage interest, rather than deducting it in full from your profits. That’s been the case for holiday lets since April 2025.
Does Making Tax Digital apply to holiday lets?
Yes, if your rental and self-employed income before costs adds up to more than £50,000. The limit drops to £30,000 from April 2027 and £20,000 from April 2028.
Should my holiday let be in a limited company?
Sometimes, but moving an existing property into a company can trigger tax. We’ll compare the options with your own figures before you decide.