Short-Term Lets in England: Licensing, the 90-Night Rule and HMRC Tax Treatment (2026)

The London 90-night cap, the new C5 use class and registration scheme, and how HMRC taxes short-term let income after the Furnished Holiday Lettings regime was abolished on 6 April 2025 — grounded in GOV.UK and HMRC sources.

Key facts (sourced) - London 90-night rule: residential STL nights capped at 90 per calendar year — Deregulation Act 2015 ss.44–46. - FHL regime abolished from 6 April 2025 — HMRC policy paper. - VAT registration threshold: £90,000 rolling 12-month turnover — GOV.UK VAT. - Business rates self-catering test: 140 days available + 70 days actually let.

Short answer

In England, short-term letting of a whole home in Greater London is capped at 90 nights per calendar year under the Deregulation Act 2015 unless planning permission for change of use is obtained. From 6 April 2025 HMRC abolished the Furnished Holiday Lettings (FHL) regime, so income from short-term and holiday lets is now taxed under the standard UK property business rules on the SA105 — the same finance-cost restriction and replacement-of-domestic-items relief that apply to a normal residential let. The VAT registration threshold for short-term let receipts is £90,000 of UK taxable turnover in any rolling 12 months.

In detail

The 90-night rule in Greater London

Sections 44–46 of the Deregulation Act 2015 amended the Greater London Council (General Powers) Act 1973 so that using residential premises in Greater London for "temporary sleeping accommodation" is not treated as a material change of use provided the total nights let in a calendar year do not exceed 90. Exceeding 90 nights without planning permission for change of use is a breach of planning control. The cap is per dwelling, per calendar year, and resets on 1 January.

References: Deregulation Act 2015 ss.44–46 (legislation.gov.uk) and GOV.UK — Short term lets in London.

Planning Use Class C5 and the registration scheme (England, outside London)

In response to the 2023 DLUHC consultation on short-term lets in England, the government confirmed:

A new Use Class C5 ("short-term let") to be introduced through changes to the Use Classes Order, distinguishing a dwellinghouse let on a short-term basis from a primary-residence C3 dwellinghouse.
A mandatory national registration scheme for short-term lets in England, to be implemented through secondary legislation under the Levelling-Up and Regeneration Act 2023.

These changes are subject to commencement regulations and are not yet fully in force. Landlords should check the current commencement position before relying on either route.

References: GOV.UK — Introducing a use class for short-term lets and associated permitted development rights (consultation response) and GOV.UK — Short-term lets in England: registration scheme consultation response.

HMRC: the FHL regime was abolished from 6 April 2025

The Finance (No. 2) Act 2024 repealed the Furnished Holiday Lettings rules with effect from 6 April 2025 for income tax (and 1 April 2025 for corporation tax). Properties previously qualifying as FHLs are no longer treated as a separate trade-like business. From the 2025–26 tax year onwards:

Income is reported as part of the landlord's single UK property business on the SA105 pages, alongside any other residential letting income.
Finance costs (mortgage interest) on the residential property are restricted to a basic-rate (20%) tax reducer; they are no longer fully deductible against profits.
Capital allowances are no longer available on new expenditure for furniture and equipment in former-FHL properties. Replacement of domestic items relief under section 311A ITTOIA 2005 applies instead.
Former-FHL profits no longer count as relevant earnings for pension contribution purposes.
Business Asset Disposal Relief, rollover relief and gift holdover relief are no longer available on disposals of former-FHL properties (subject to anti-forestalling rules announced at Spring Budget 2024).

References: HMRC policy paper — Abolition of the Furnished Holiday Lettings tax regime and HMRC PIM4100 series (Property Income Manual — Furnished Holiday Lettings, withdrawn from 6 April 2025).

Standard property business rules that now apply

With FHL gone, short-term let income follows the rules in HMRC PIM1020 — Rental business: introduction:

Cash basis is the default for individual landlords with rental receipts of £150,000 or less; the accruals basis may be elected.
Allowable expenses must be incurred wholly and exclusively for the property business — cleaning, laundry, platform commissions, utilities, council tax (where the landlord pays), letting agent fees and insurance are deductible where they meet that test.
Replacement of domestic items relief under HMRC PIM3210 covers replacement (not initial provision) of furniture, white goods, soft furnishings, kitchenware and similar, net of sale proceeds and any improvement element.
Apportionment is required where the property is also used personally — see HMRC PIM2068.

Rent a Room scheme for room-only short-term lets

Where the landlord lets a furnished room in their only or main home — including on a short-term basis through a platform — up to £7,500 of gross receipts per tax year may be exempt under the Rent a Room scheme. The scheme does not apply where the whole property is let, or where the landlord does not live there as their main residence.

References: GOV.UK — Rent a Room scheme and HMRC PIM4001.

VAT on short-term let receipts

Short-term holiday accommodation is a standard-rated supply for VAT. Once a landlord's UK taxable turnover (which includes short-term let receipts but not residential AST rents, which are exempt) exceeds the registration threshold of £90,000 in any rolling 12 months, they must register for VAT and account for VAT on the gross receipts.

References: GOV.UK — VAT registration thresholds and HMRC VAT Notice 709/3: hotels and holiday accommodation.

Council tax vs business rates

A self-contained property in England that is available for short-term let for at least 140 days and actually let for at least 70 days in the previous 12 months is assessed for non-domestic rates by the Valuation Office Agency, not council tax. Below

Sources: - Deregulation Act 2015 ss.44–46: https://www.legislation.gov.uk/ukpga/2015/20/section/44/enacted - GOV.UK — Short-term lets in London: https://www.legislation.gov.uk/ukpga/2015/20/section/44 - GOV.UK — C5 use class consultation response: https://www.gov.uk/government/consultations/introduction-of-a-use-class-for-short-term-lets-and-associated-permitted-development-rights - GOV.UK — Registration scheme consultation response: https://www.gov.uk/government/consultations/consultation-on-a-registration-scheme-for-short-term-lets-in-england - HMRC — Abolition of FHL regime: https://www.gov.uk/government/publications/furnished-holiday-lettings-tax-regime-abolition - HMRC PIM4100 (FHL, withdrawn): https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim4100 - HMRC PIM1020: https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim1020 - HMRC PIM2068: https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2068 - HMRC PIM3210: https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim3210 - HMRC PIM4001 — Rent a Room: https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim4001 - GOV.UK — Rent a Room scheme: https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme - GOV.UK — VAT registration thresholds: https://www.gov.uk/vat-registration-thresholds - HMRC VAT Notice 709/3: https://www.gov.uk/guidance/hotels-holiday-accommodation-and-vat-notice-7093 - GOV.UK — Self-catering business rates: https://www.gov.uk/guidance/how-non-domestic-property-including-plant-and-machinery-is-valued

Published: 2026-05-29.

Last reviewed: 2026-08-30.

General summary; not legal advice.