mybusinessrates.gov.uk/wales the official government website

Bed & breakfast

If you intend to offer bed & breakfast accommodation in your own home, talk to your local Valuation Office about whether you’ll be liable for business rates.

Generally speaking, as long as you meet all the following criteria, you don’t have to pay business rates (you simply pay council tax on your property):

• you intend to accommodate no more than six people at any one time in the coming year
• the property is your sole or main residence
• B&B is only a subsidiary use

The subsidiary use test ensures that, as far as possible, if you provide limited short stay accommodation in your own home, you aren’t liable for business rates. It is only when bed & breakfast becomes a significant business enterprise that your property is subject to business rates. The test takes account of the following factors:

Accommodation used – if half or more of your property is used for B&B at any time, it is likely that the property will be liable for business rates.

Adaptations to the property – if you have made changes specifically to benefit guests, the property could now be liable for business rates. These alterations might include additional wash basins, bathrooms or ensuite facilities, or fire precautions.

Nature of use – factors such as whether the property is open all year, whether it serves evening meals or has a licence are also taken into account.

If you intend to accommodate more than six people at any one time you will have to pay business rates on the part of your property used for that purpose. You will still have to pay council tax on the part of the property used as your own home. Your local Valuation Office will be able to advise you further.

Any assessment of your property’s rateable value could take into account any rents you pay, the number and type of bedrooms, the location and quality of the accommodation, and whether there are restaurant facilities open to non-residents.