Holiday-let owners preparing to take on Government over tax

The decision to scrap tax privileges for holiday home owners, will also affect self-catering accommodation letting businesses of which there are more than 1,300 in North Yorkshire alone, when it comes into law in the new financial year.

More than 110 MPs have already criticised the proposals, warning they will result in significant loss of jobs and damage to rural and seaside economies and could cost the tourism industry millions of pounds.

Now the Tourism Association of North Yorkshire has set up a petition and is planning to boycott the Government's quality rating scheme – which awards stars to holiday businesses – if it pursues the decision.

Chris Parkin, chair of the Tourism Association of North Yorkshire, which has 130 members, said: "The Government has moved the goalposts and we are all going to be hit by this, absolutely.

"We don't understand where they are coming from.

"Self-catering holiday lettings should be considered the same as hotels and other guest accommodation but removing furnished holiday letting rules will tax them as if they are private landlords.

"I will be putting forward a motion for the wholesale withdrawal of all our members from Government quality inspections which we pay up to 400 for, and to commission another body to do the same job."

John Wicks, who runs Let's Holiday, self catering cottages in Newton-on-Rawcliffe, Pickering, said: "I absolutely will be behind this campaign

"We contribute so much to the economy and the damage that is going to be caused to people like me by this is huge.

"It is estimated this will reduce our earnings by a third. I run four cottages, take only six days off a year and make a very modest profit.

"But this is my job. When they take away the tax breaks I probably won't be able to continue doing it anymore."

The repeal of the furnished holiday lettings rules was announced in the 2009 Budget but will come into effect in April this year.

It would stop both holiday home owners and self-catering letting businesses from using their properties to defer capital gains tax payments or offset losses made on their investment against their income.

Those opposing the move claim operators would find it harder to invest in property improvements or cover any losses.

Julian Fearn, 58, who runs Keldhead Farm self-catering cottages at, Pickering, said: "I am completely appalled by this and we will fight it with everything we have got.

"This has been a family business for 15 years and I have real worries, this is going to cut right into us.

"We are open 365 days a year and pour everything into this but suddenly we will not be a business in the eyes of the taxman anymore."

The Country Land and Business Association, has backed the campaign.

Dorothy Fairburn, its Yorkshire director, said: "We have real concerns this will put people out of business, this is going at a small problem with a sledgehammer.

"We are absolutely behind the North Yorkshire campaign and would urge others across the country to do the same."

The Treasury has insisted the move will only affect wealthy people with second homes rather than businesses involved in tourism.

The annual general meeting of the Tourism Association of North Yorkshire is taking place on March 3.