Self-Catering properties pay local taxes either through the Council Tax or Business Rates systems. To come under the Council Tax system the property must be available to let for less than 140 days per financial year (1 April – 31 March). If the property is available to let for over 140 days per year, and it has been let for at least 70 days, it will attract Business Rates.
The Council Tax is set by allocating a dwelling to one of eight valuation bands. The annual charge is then set by each local Council, with the amount varying for each band (band A is the lowest). Self-catering operators paying the Council Tax will enjoy the same benefits of a domestic dwelling, including a refuse collection. Water and sewerage is paid for in addition based on the Council Tax banding if water not through a meter (or private supply).
To ensure that a self-catering property remains in the Council Tax system, operators must insert wording in their publicity material that the property is only available for less than 140 days per annum, e.g. from mid-May to end September.
Business Rates for self-caterers are calculated from the Rateable Value (RV) of the property. The RV is an Assessor’s estimate of the annual rent which a subject would command on the open market. For self-catering, this is based on bed-spaces (or notional bed-spaces), and the RV is set per bed-space. The operator pays the Scotland-wide poundage per RV, set annually by the Scottish Government. There is the Small Business Bonus scheme for small operators, where the smallest can receive 100% relief. See separate Guidance Sheet ‘Business Rates: What you need to Know’ This relief has been severely curtailed for the 2023 Revaluation.
Water meters have been installed in some properties paying business rates and on a public supply, in which case water is paid on a volume basis. If there is no water mater both water and sewage is charged based on RV.
Refuse collection also needs to be paid for in addition, although different Councils have different policies and costs.
You can challenge your rates assessment, but this must be done by 31st July 2023. This is done by submitting a proposal against the issued assessment. Proposals need to contain detailed information and include all evidence that the challenge is based on, including reference to comparable properties, if relevant. Additional information may not be allowed after the proposal is submitted. Due to the onerous requirements now in place, members are advised to take professional advice before submitting any proposal.
Disclaimer – Guidance Sheets are written by experienced Members of the ASSC and other experts. The information in the ‘Guidance Sheet’ is provided by the ASSC for use by Members in support of their own independent business decisions. It does not constitute advice or instruction for which the ASSC can be held liable in any way whatsoever. All Members and other readers remain responsible for the consequences of any decisions taken whether in the light of information gained from this Guidance Sheet or not.