A newspaper claims Labour is pondering  a tax raid on landlords of holiday lets at next month’s Budget.

The Daily Telegraph reports that James Murray, a junior Treasury minister, confirmed in a written parliamentary answer that his department was reviewing “the tax treatment of short-term lets, such as self-catering accommodation”.

He said “concerns have been raised” about second-home owners using small business rates relief to minimise tax liabilities.

The suggestion is that some second-home owners are avoiding council tax by claiming their second homes are holiday lets.

The Telegraph floats the idea that all self-catered accommodation could be subject to council tax instead of business rates. 

A spokesperson for the Professional Association of Self-Caterers tells the paper: “The average self-catering business owns 1.2 properties and it is usually a second income, often run by working mothers or retired people, who have already been hit by 25 government interventions in the past four years.”

Holiday lets in England are currently treated the same way as all small businesses. 

If they have a rateable value of £12,000 or less and they are the only property used by the business, they pay no business rates. Business premises with a rateable value of £12,001 to £15,000 receive a discount on business rates on a sliding scale.

To prevent people avoiding council tax on second homes by pretending they are a business, recently introduced rules mean that to qualify for small business rates relief, a property must be available for rental for at least 140 days per year and actually let for at least 70.

There are around 79,000 registered holiday lets in England and another 8,700 in Wales.

A Treasury spokesman tells the Telegraph: “As has always been the case, decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.”