Autumn Budget 2026: What It Means for Holiday Lets and Pet-Friendly Businesses in Cornwall
If you own a holiday let in Cornwall, the Autumn Budget brought one change you’ll want to plan for: tax rates on property income are set to rise from April 2027.
There was some more encouraging news on business rates for eligible hospitality properties. And while the Budget confirmed a legal route for local visitor levies, Cornwall has not decided whether to introduce one.
Here’s what’s changing, what isn’t, and a few practical steps to help you prepare.
The main change: property income tax rates rise in April 2027
From 6 April 2027, new rates for property income will apply in England, Wales and Northern Ireland:
| Property income rate | From 6 April 2027 |
|---|---|
| Basic rate | 24% |
| Higher rate | 44% |
| Additional rate | 49% |
The former Furnished Holiday Lettings (FHL) tax regime ended on 6 April 2025. Holiday let profits are now generally treated as property income under the ordinary property rules, so the new rates will affect many former FHL owners.
For a higher-rate taxpayer, the rate on property profits falling into the higher-rate property band will rise from 40% to 44%. As a simple illustration, that is £40 more tax for every £1,000 of taxable property income in that band, before considering your wider circumstances and any other tax calculations.
The change applies to property income, not your employment income. Scotland has different income-tax arrangements, so owners there should check the rules that apply to them.
The increase doesn’t take effect until April 2027, giving you time to review your likely profit and plan. It’s worth getting advice before making major spending or ownership decisions.
Business rates: potentially helpful news for eligible holiday lets
The Budget also announced changes to business rates for qualifying retail, hospitality and leisure properties in England.
From 1 April 2027, the rateable-value limits for Small Business Rates Relief (SBRR) are due to rise to:
- £18,000 or below for full relief
- Between £18,000 and £21,000 for tapered relief
These are rateable values, not your holiday let’s annual income or booking revenue. Relief depends on the property meeting the relevant requirements, so the new limits will not automatically benefit every holiday let.
The Budget also announced a cap on qualifying RHL business rates bills at CPI inflation for two years, from 1 April 2027. Separately, qualifying self-catering accommodation in England has been able to access permanently lower RHL multipliers since April 2026. The precise effect on your bill depends on your property’s classification, rateable value and reliefs.
To be assessed for business rates rather than council tax in England, self-catering accommodation generally needs to be let commercially for short periods of 28 nights or less, available for at least 140 nights in the previous 12 months, actually let for at least 70 nights, and intended to be available for at least 140 nights in the next 12 months. You also need to apply to the Valuation Office.
If you’re unsure whether your property qualifies, check the official GOV.UK guidance on business rates for self-catering and holiday lets. Different rules apply in Scotland, Wales and Northern Ireland.
Could Cornwall introduce an overnight visitor levy?
The Budget confirmed legislation to allow certain local authorities, including leaders of Foundation Strategic Authorities, to introduce an Overnight Visitor Levy. Cornwall is expected to have Foundation Strategic Authority status, but there has been no decision to introduce a levy in Cornwall.
If adopted locally, the levy would be charged as a percentage of accommodation cost rather than as a flat amount. The rate and detailed arrangements have not been confirmed. Local consultation and decisions on how any funds would be spent are part of the process; the Government expects relevant authorities to set out spending plans by early 2028.
For holiday let owners, the practical question is how to respond if a levy is introduced: you might pass it on to guests, absorb some or all of the cost, or reflect it in your pricing. There’s no need to change your prices on the basis of speculation, but it makes sense to keep an eye on local decisions and consider how a new charge could affect your bookings.
Cornwall Council has also called for a change to the rules around holiday lets and council tax. This is a separate issue from the visitor levy. You can read the council’s guidance on using your home as a business.
What the Budget didn’t change
A few points may help keep the headlines in perspective:
- The Budget did not change the £90,000 VAT registration threshold. VAT registration is based on taxable turnover, not the £30,000 Making Tax Digital threshold. Read GOV.UK guidance on when to register for VAT.
- The special FHL regime had already ended in April 2025. Individuals can no longer claim the previous full deduction for residential finance costs in the same way, use the old averaging rules for future years, or claim the former FHL-specific capital allowances on new expenditure. Transitional rules and other reliefs may still matter, so check your circumstances rather than assuming every old claim is lost.
- The Budget did not change the headline Capital Gains Tax rates.
If you’re still adjusting to the end of the FHL rules, it’s a good time to review how your income, mortgage interest and property costs are being recorded. Our tax returns and planning support can help you make sense of the rules in plain English.
Making Tax Digital: get your records ready
From 6 April 2027, sole traders and landlords with qualifying income over £30,000 will generally need to use Making Tax Digital for Income Tax. Qualifying income is measured before expenses and allowances. If you have both property and self-employment income, those amounts can count together when checking whether you meet the threshold.
That may matter if you own a holiday let and also run a dog-walking, grooming or boarding business. The Budget did not announce a special new tax for animal-related businesses; they’re affected by the same general property, VAT and digital-record rules as other small businesses.
Under Making Tax Digital, you’ll need compatible software to keep digital records and send quarterly updates to HMRC, as well as complete your tax return. The quarterly updates are summaries, not four extra tax returns. See HMRC’s Making Tax Digital guidance for sole traders and landlords, or explore our Making Tax Digital support.
A practical checklist for holiday let owners
A few straightforward checks now can make planning for 2027 easier:
- Check your business rates position. Review the 140-night availability and 70-night letting tests, and confirm whether you need to apply to the Valuation Office.
- Model the property tax change. Estimate your taxable property profit and consider how the new rate may affect your wider tax position.
- Review major spending plans. If you’re considering substantial repairs or improvements, get advice on the tax treatment and timing before committing.
- Look ahead to 2027 pricing. Keep the possible visitor levy on your radar, but wait for confirmed local decisions before changing guest prices.
- Tidy your records. Keep booking income, invoices, finance costs and business expenses organised. Dog-friendly extras and cleaning costs may be allowable where they are incurred wholly and exclusively for the letting business; keep clear records and check any mixed personal use.
- Check whether MTD applies to you. Add together relevant property and self-employment income before expenses to see whether you may need to prepare for April 2027.
If juggling bookings, receipts and tax rules is taking up too much of your time, a making tax digital accountant or VAT return services UK can help you keep the admin clear and accurate.
Get a clear plan for your holiday let
The biggest Budget change for many holiday let owners is the increase in property income tax rates from April 2027. Business rates changes may offer some relief if your property qualifies, while a Cornwall visitor levy remains a possibility rather than a decision.
You don’t need to work it all out alone. We’ll listen to how your property and any other business income fit together, then explain the next steps without the jargon. If you’d like to talk through your situation, book a friendly, no-obligation 20-minute chat.