Calls for action over second home owners who avoid tax

A Cornish MP has called on the government to take action over second homeowners who avoid paying tax in Cornwall.

Some holiday home owners register their properties as businesses, and so avoid paying council tax and benefit from small business rates relief.

Speaking in Prime Minister’s Questions, St Austell and Newquay MP Steve Double said it’s unacceptable and the loophole needs to be fixed.

He says it effectively takes them out of contributing to the cost of local services altogether, and that is unfair on the majority of people in Cornwall who pay their local taxes.

Standing in for Theresa May, Cabinet Office Minister David Lidington promised that action would be taken against anyone who lies.

Speaking to the Commons, Steve Double said: “Holiday homes in Cornwall are a mixed blessing, they provide important support to our local economy but they also take up vitally needed housing stock and push up prices beyond the reach of many local people.

“In addition to that, many of them avoid paying council tax by switching to business use and then enjoying the benefits of small business rate relief.

“Does my right honourable friend agree with me that this situation is unacceptable, and would he use his good offices to help the government close this loophole?”

David Lidington responded: “My honourable friend raises a valid point. Clearly it’s right that holiday owners should pay the correct tax.

“Obviously individual decisions over whether the property should pay council tax or business rates rest with the Valuation Office Agency, which operates independently of ministers.

“But if a property is available to rent for 140 days or more a year, then it will be subject to business rates and if it does not meet this test, council tax will be due.

“If an individual provides false information in order to seek business rate relief, that person is liable to summary conviction or a fine, or both.”

Commenting after PMQs, Steve said: “I recently met with the new Local Government Minister and raised this issue.

“It is clearly an unfair gap in existing regulations and one that needs to be closed as soon as possible.

“I was pleased to be able to raise the unfairness of this loophole in Parliament today and I will continue to press the government to find a common sense solution that ensures everyone pays their share towards local services.”

4:12pm 31st January 2018

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