SCARBOROUGH MP Robert Goodwill has taken a petition to Downing Street in a bid to help holiday-let businesses in the area.

At the 2009 budget, the Chancellor announced his intention to include legislation in the Finance Bill 2010 to discontinue tax relief available to furnished holiday lettings, starting in the tax year 2010-11.

Mr Goodwill agreed to deliver the 1,430 signatures by hand to the Prime Minister's address.

He said: "I am very disappointed at the Chancellor's decision to withdraw these tax breaks for businesses running holiday cottages. These changes were brought in to stop those with second homes in Spain, for example, setting off costs on these against their income tax.

"Second home owners will no longer be able to use their properties to offset losses made on their investment against their income, which include mortgage interest payments and maintenance bills.

"The problem is many genuine holiday businesses, which often form part of farm diversification projects, will also be caught up in this. They will not be able to set off investment in the new farm cottages against profits on the farm."

The petition calls on the Chancellor and MPs not to implement the proposed repeal of the furnished holiday lettings rules in April.

It also states: "The vast majority of holiday lettings properties in the UK are operated as bona fide trading businesses by hard-working men and women who not only depend on the income for their livelihood, but their guests generate considerable trade for other local businesses, many of which are located in remote areas entirely dependent upon the tourist trade.

"To arbitrarily deem such businesses to be property investment companies rather than trading companies, with the consequent adverse tax consequences which that will entail, will, without doubt, create considerable financial hardship and loss, and will result in many ceasing to trade completely.

"The consequent 'domino effect' on those other local businesses, which rely on the trade their guests generate, cannot be stressed too greatly."

25 February 2010
Source: Scarborough Evening News