How to avoid the Cambridge Council Tax premium by switching to Business Rates for short term holiday lets

With the abolition of the Furnished Holiday Let (FHL) tax regime last year and Cambridge City Council's 100% Council Tax premium on second homes now in full force, we know that managing the profitability of your short-term let has become more challenging.

Because of these heavy local tax burdens, we strongly advise evaluating whether your property can be moved from the Council Tax register to Business Rates. If your property is eligible, making this switch could completely wipe out your local property tax bill.

Here is a straightforward breakdown of the criteria, the pros and cons, and the exact steps you need to take.

The Criteria for Business Rates

In England, you do not simply choose to pay business rates; your property must legally comply with strict criteria. To be assessed for business rates by the Valuation Office Agency (VOA), your property must meet two strict thresholds over a rolling 12-month period:

• Availability: It must be available to let commercially for at least 140 nights.

• Occupancy: It must be actually let to paying guests for at least 70 nights.

(Note: You must also intend to make it available for 140 nights in the following 12 months. Nights you used the property personally do not count towards these totals).

The Pros and Cons of Switching

The Pros:

• 100% Tax Relief: If your property’s Rateable Value (RV) is £12,000 or less, and it is your only business property, you will likely qualify for Small Business Rate Relief (SBRR). This brings your annual local tax bill down to £0. We have an owner who rents out 2 x 2 bedroom cottages in Great Eversden and the combined rateable value for both properties together is only £4,200 so your house is going to be well below the £12000.

• Avoiding the Council Premium: By moving to the business rates register, you completely bypass Cambridge City Council’s 100% Council Tax premium, which effectively doubles a standard residential bill.

• Backdated decision: The application process can take a number of months but once accepted, the decision is backdated to the date of the application and any council tax paid is refunded

The Cons:

• Commercial Waste Collection: Once registered as a business, you lose access to Cambridge’s free residential bin collections. You will need to set up and pay for a commercial waste contract. You can do this through Cambridge Council.

• Expansion Penalties: SBRR is intended for single-property businesses. If you own or buy a second short-term let, the combined Rateable Value could push you over the threshold, meaning you could lose your 100% relief on both properties.

The Process to Apply

Here are the steps to make the switch:

1. Check your Estimated Rateable Value: Visit the government portal at www.gov.uk/find-business-rates. You can search for your property (or a similar one on your street) to check the current RV and the new future RV taking effect in April 2026 to see if you fall under the £12,000 SBRR threshold.

2. Request Your Booking Data: Reply to this email, and we will generate a formal report of your property’s availability and booked nights over the last 12 months to serve as your evidence.

3. Apply to the VOA: Contact the VOA directly (or submit form VO 6048) to request that your property be moved to the Business Rates list. You will need to submit the booking evidence we provide.

4. Notify Cambridge City Council: Once the VOA confirms the change and issues a new business rates valuation, contact the council to close your Council Tax account and apply for Small Business Rate Relief.

We are here to support you through this transition. Please let us know if you would like us to help you prepare the application. The following is a checklist of the information you will be asked for:

VOA Evidence Checklist for Business Rates Application

If you are applying to move your short-term let from the Council Tax register to Business Rates, the Valuation Office Agency (VOA) requires concrete proof that your property meets the 140 days available / 70 days actually let thresholds.

The VOA conducts strict compliance checks. To ensure your application is processed smoothly, please gather the following evidence.

1. Proof of "Actually Let" (Minimum 70 Nights)

You must prove that paying guests occupied your property for at least 70 nights in the preceding 12 months.

• A Comprehensive Booking Log: A spreadsheet or report detailing the check-in and check-out dates for every booking over the last 12 months. (If we manage all your bookings, we will provide this report for you).

• Proof of Commercial Transactions: Invoices, receipts, or payout statements from platforms (Airbnb, Booking.com, VRBO) proving that these were paid, commercial bookings.

⚠️ Important Exclusions for the 70 days:

• Long Stays: Any single booking that lasts for more than 28 consecutive nights is classed as a residential tenancy by the VOA and does not count towards your 70-day short-term let total.

• Personal Use: Nights you used the property yourself, or let it out to friends and family at a discounted rate, do not count. The letting must be strictly commercial, with a view to making a profit.

2. Proof of "Availability" (Minimum 140 Nights)

You must prove that the property was actively marketed and available to book for at least 140 nights in the last 12 months (and that you intend to do the same for the next 12 months).

• Active Listings: Web links or screenshots of your property’s live listings on booking platforms or our agency website.

• Availability Calendars: Screenshots or exports of your booking calendars showing the unbooked days were genuinely left open for the public to book.

• Agency Agreement: A copy of your management contract with us, demonstrating your ongoing commercial intent to let the property.

⚠️ Important Exclusions for the 140 days:

• Closures: Days where the property was blocked out for personal use, deep cleaning, renovations, or repairs cannot be counted as "available."

3. The Application Form (VO 6048)

To trigger the assessment, you will need to fill in a specific government form for properties in England.

• Download the Form: You can search for "Apply for business rates for a self-catering property in England" on GOV.UK to download the PDF form. (Note: If the VOA has proactively contacted you, they will have sent you a form called a VO 6048 to fill out).

• Submission: The form will require you to declare your exact letting numbers and property details. Once complete, it usually needs to be emailed directly to the VOA's specialist rating team alongside your evidence.