Taxpayers experiencing lengthy wait times—up to 23 minutes—to connect with HM Revenue and Customs (HMRC) may now have insight into the cause: a significant portion of inspectors are deployed in Devon and Cornwall, intensifying efforts against second homeowners.
A recent revelation stemming from a Freedom of Information Request by The Telegraph exposes a remarkable surge in HMRC investigations targeting holiday let investments. Between the tax years 2021-22 and 2023-24, these inquiries skyrocketed by twenty-fold, unveiling a vigorous crackdown on Staycations, Airbnb rentals, and the cessation of Covid exemptions.
This crackdown coincides with Chancellor Jeremy Hunt’s recent elimination of tax relief on furnished holiday lets, amplifying the financial burden on investors. Mortgage advisors corroborate the surge in buyers leveraging tax breaks for holiday rentals, including provisions for offsetting mortgage interest payments against profits and capital gains tax relief upon property sale.
According to wealth management firm Quilter, these changes could render investors nearly £3,000 poorer annually. An HMRC spokesperson defended the crackdown, stating, “The short-term property rental market is growing fast, and it’s our role to ensure owners pay the right tax, creating a level playing field for all. We have dedicated specific resources to opening enquiries where there is evidence that those renting out holiday lets have not declared income.”