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Business rates or council tax for a holiday let: the 140/70 and 182-day tests and the second homes premium

Sergej Sitki · founder of ReceptionGO and host
Published 20 October 2026 · 7 min read

General information, not legal or tax advice. Check your own case with your local council, HMRC or the relevant revenue authority, or an accountant.

A holiday let pays business rates instead of council tax only if it passes a day test. In England and Scotland it must be available to let for 140 days and actually let for 70 days a year; in Wales 252 and 182. Fail the test and you pay council tax — often with a second homes premium of up to 100% (up to 300% in Wales).

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Whether a holiday let pays business rates or council tax decides one of its biggest fixed costs. With small business rate relief, a cottage on business rates can pay nothing. The same cottage on council tax with a second homes premium can pay double the normal bill. The difference depends on a few numbers you have to be able to prove.

The day tests in each nation

Northern Ireland has its own rating system; holiday lets there are generally rated as domestic property.

What counts and what does not

• Counts as let: nights let to paying guests on normal commercial terms, from any channel.
• Does not count: your own use, nights for family and friends, nights let to them free or at a discount.
• Availability means genuinely open for booking at a market price — not a calendar listed at three times the going rate. Nights closed for repairs or private use do not count.

The evidence the VOA wants

The Valuation Office Agency asks for proof of both tests. Have ready:

1. Letting records: booking confirmations, dates and amounts for each stay, from every platform.
2. Availability: listings and calendars showing the property was open for booking, and closure dates.
3. Payment evidence: payout statements or guest payments that match the bookings.
4. Marketing: links to the listings and your own website.

A property on four channels has four partial calendars. Without one combined record, proving 70 nights — or 182 in Wales — means stitching together exports from each platform. That is exactly the job a single calendar for all channels does for you.

Small business rate relief

In England, a holiday let with a rateable value of £12,000 or less gets 100% relief if it is your only business property (or your other properties each have a rateable value under £2,900). Between £12,000 and £15,000 the relief tapers. Many single cottages pay no business rates at all. Owners with several lets lose the relief once they have more than one property above the small thresholds.

New rating lists came into force on 1 April 2026, so rateable values have changed for many properties. Check your new value on GOV.UK and appeal through the VOA’s check, challenge, appeal process if it looks wrong.

Wales and Scotland run their own relief schemes; in Scotland the Small Business Bonus Scheme gives full relief up to £12,000 for a single property, but self-catering units must meet the 140/70 test to be on the valuation roll at all.

Council tax and the second homes premium

If the property fails the test, it is a dwelling for council tax. Because nobody lives in it as their main home, it counts as a second home:

• England: since 1 April 2025 councils can charge a premium of up to 100% — double council tax — on second homes. Most councils with many holiday lets have adopted it. Some exceptions apply, for example where planning conditions prevent use as a main home.
• Wales: councils can charge up to 300% on second homes since April 2023; Gwynedd and Pembrokeshire have used high premiums.
• Scotland: up to 100% since April 2024.

How to stay on the right side

• Price to let, especially in the shoulder season. Seventy nights is not much in summer; it is a lot if you only open for summer.
• Count every night from every channel — direct bookings count the same as Airbnb.
• Keep personal use separate and recorded, so it is never confused with lost availability.
• Check each year before 1 April: the test looks at the previous year.

Related rules

Business rates are separate from income tax. Since April 2025 holiday lets have been taxed like ordinary residential lettings — see holiday let tax after the FHL regime. In Wales, the new visitor accommodation register gives councils a list of every holiday let, which will make the 182-day test easier to check. England’s own register follows in 2027: short-term let registration in England.