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Holiday Let Tax Calculator

Calculate tax implications for Furnished Holiday Lets (FHL) including qualification rules, allowable expenses, and comparison with BTL treatment.

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Free to use
FHL income & letting days
Enter your holiday let details

Qualifies as FHL

Full mortgage interest deduction available

Allowable Expenses

Higher Rate (40%)

Tax calculation
Based on FHL rules
Taxable Profit

£11,700

After all deductions

Total Tax Due

£4,680

Income tax + NI

Post-Tax Profit

£9,020

Your take-home

Effective Tax Rate

34.2%

On net profit

Tax Breakdown

Gross income£30,000
Total expenses-£16,300
Net profit before CA£13,700
Capital allowances-£2,000
Taxable profit£11,700
Income tax (Higher Rate (40%))-£4,680
Class 4 NI-£0
Post-tax profit£9,020

FHL vs BTL Tax Comparison

As FHL

£9,020

post-tax profit

As BTL (Section 24)

£6,620

post-tax profit

FHL saves £2,400/year in tax

Revenue per day let

£250

Expense ratio

54%

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FHL Tax Benefits

  • Full mortgage interest deduction (not restricted like BTL)
  • Capital allowances on furniture and equipment
  • Business Asset Disposal Relief on sale (10% CGT)
  • Loss relief against other income in some cases

About the Holiday Let Tax Calculator

What it does and how it helps you

The Holiday Let Tax Calculator helps UK serviced accommodation investors understand the tax implications of Furnished Holiday Lets (FHL). Calculate your tax liability, understand FHL qualification rules (210-day availability and 105-day letting test), and compare the significant tax savings versus standard Buy-to-Let properties affected by Section 24.

FHL qualification checker (210/105-day test)
Full mortgage interest deduction calculation
Capital allowances on furniture and equipment
Side-by-side comparison with BTL Section 24 treatment

How It Works

Understanding the calculation method

The FHL tax calculator works by: 1. Checking FHL Qualification - Verify your property meets the 210-day availability test and 105-day letting test required by HMRC 2. Calculating Allowable Expenses - Include all operating costs plus full mortgage interest deduction (unlike BTL) 3. Applying Capital Allowances - Deduct furniture, fixtures, and equipment costs 4. Computing Tax Liability - Calculate income tax at your marginal rate plus Class 4 National Insurance 5. Comparing with BTL Treatment - Show the tax saving from full mortgage interest relief versus Section 24 restrictions The calculator demonstrates the substantial tax advantages of FHL status, including full mortgage interest deduction (not restricted to 20% tax credit like BTL), capital allowances on furnishings, and potential Business Asset Disposal Relief on sale.

When to use this calculator

Use this calculator when evaluating holiday let investments to understand your after-tax returns. Essential for comparing FHL properties with standard BTL investments, planning your SA tax strategy, and ensuring your letting pattern qualifies for FHL status. Particularly valuable for higher-rate taxpayers who benefit most from full mortgage interest relief.

Frequently Asked Questions

Common questions about this calculator

Your property must be available for commercial letting for at least 210 days per year to qualify as an FHL. Personal use doesn't count towards this total. The property must also be actually let for at least 105 days (excluding lettings of more than 31 consecutive days). Meeting both tests qualifies you for FHL tax benefits.
FHL status allows full mortgage interest deduction against rental income, while BTL landlords only get 20% tax credit under Section 24. For a higher-rate (40%) taxpayer with £10,000 mortgage interest, FHL saves £4,000 in tax versus £2,000 BTL relief - a £2,000 annual saving. Additional-rate taxpayers (45%) save even more.
Yes, FHL properties qualify for capital allowances on furniture, fixtures, equipment, and white goods. You can typically claim 18% annual writing down allowance or use the Annual Investment Allowance (£1 million limit 2024/25) for immediate relief. This is a major advantage over BTL where these items are revenue expenses.
Yes, FHL income is treated as business income, not property income. You'll need to register as self-employed and complete a Self Assessment tax return. You'll also pay Class 2 (£3.45/week if profits exceed £6,725) and Class 4 National Insurance (6% on profits over £12,570), but gain access to business tax reliefs.
If you fail the 210/105-day tests, you can elect to average over 2-3 years if one year was exceptional. Otherwise, HMRC will treat that year as normal property income under Section 24 rules, losing mortgage interest relief and capital allowances. It's crucial to track lettings carefully and market actively to maintain qualification.

Related Property Terms

Furnished Holiday Let FHL210-day test105-day letting requirementFHL mortgage interest reliefCapital allowances holiday letSection 24 taxBusiness Asset Disposal ReliefHoliday let tax planningShort-term rental tax UKAirbnb tax calculator