Latest regulatory updates

The Competition and Markets Authority (CMA) has just finished consulting on new guidance for businesses on complying with the requirements of the Digital Markets, Competition and Consumers Act 2024 (DMCC Act). This Act was introduced last year in order to protect consumers from unfair practices and make pricing, especially for products and services bought online, more transparent for consumers. 

While the legislation includes new rules for subscription contracts and the banning of fake reviews, the DMCC Act also makes it explicit that businesses need to inform consumers about the full cost of their products and service throughout the purchase process, from the price stated in advertising right through to when the final payment was made. While the guidance is not yet finalised, it is worth understanding it at this stage as it is not expected to change significantly as a result of the consultation.

Presenting all mandatory charges up front

The overriding theme of the guidance is that customers should be presented with the total price of the product at the outset and that any mandatory charges must be included in the advertised price. 

This requirement is to counter “drip feed” pricing where customers are lured into the purchase process through a low headline price that then increases throughout the process so that the end price is substantially difference to the advertised price. Examples of this include the application of booking fees for tickets or cleaning charges when staying in self-catering accommodation. It can also include any surcharges that apply on certain dates that only become apparent during the purchasing process.

However, the headline offer price does not need to include non-mandatory charges such as additional optional products or services that may be offered during the booking process such as an upgrade to priority access on rides at an attraction, offering to provide wood for the wood burner at a cottage or taking out cancellation insurance that improves the standard terms and conditions regarding cancellations.

It should be noted that the CMA has previously published guidance for the accommodation sector which touched on this issue. The guidance - Principles for businesses offering online accommodation booking services – was introduced in 2019 and, while aimed primarily at online accommodation booking platforms, it is applicable to all accommodation businesses. This guidance states that all mandatory costs related to staying at a premises have to be included in the headline price.

The new guidance therefore reinforces and builds on the existing guidance for accommodation businesses, making it clear that any “invitation to purchase” (i.e. when a business provides consumers with information on, and the cost of, a product or service they are providing), this must include all mandatory charges so that consumers can easily compare competing offers from different suppliers.

This requirement applies to all media through which an invitation is made including print material, online, through text messages, or on TV. It also applies regardless of whether a direct link is provided to enable the purchase of the product or service. 

The central requirement of an invitation to purchase is that the price stated must be realistic, meaningful and attainable by the customer so as to not mislead them into undertaking the purchasing process. If there are any mandatory charges, whether imposed by the business offering the product or service, or a third party, these must be included in the price stated in the invitation to purchase. This includes any applicable taxes or local levies.

It is important to note that simply because a price is attainable, does not mean that it will comply with the legislation - it must also be realistic and not misleading. For example, stating that tickets are available “from £10” can be deemed to be misleading if the £10 tickets are just for children under five years old. Similarly, advertising family breaks from £100/night if that rate is only available for one-bedroom apartments is likely to be deemed misleading as a consumer would reasonably expect a family to constitute adults and children who would occupy separate rooms.

Price partitioning

Another practice that the new legislation bans is “price partitioning” where it is reasonable for the total cost to be calculated. For example, if an accommodation provider listed a room for £100/night and there is a £20 cleaning fee regardless of the length of stay, then it would be reasonable to separate out the cleaning cost and add it at the end as the operator would not know how long the customer wanted to stay and therefore cannot calculate the total price until the customer has decided how long they wanted to stay. However, even in this case, the customer should be informed that there is a £20 cleaning change in the invitation to purchase so that they can calculate the total cost themselves.

Where price partitioning is banned is if the operator offered a product such as a five-night stay for £500 without including the £20 cleaning cost in the headline price. This is because the total cost of the five-night stay is easily calculated.

It should also be noted that in if you have a website where customers are able to enter the party size and number of nights they want to stay, then it is possible for your system to calculate the total cost and the results of any search should include these charges. For example, if the customer undertakes a search for accommodation based on  two adults staying for two nights, all the prices that result from the search should include any one-off cleaning charges or per person per night changes because the total cost can easily be calculated based on the information that the customer provided.

If you need more information on how the implementation of the new legislation may impact your business, a copy of the draft guidance is available.

The creation of Sustainability Reporting Standards (SRS) dates back to the 2021 UN Climate Change Conference in Glasgow (COP 26), where a new International Sustainability Standards Board (ISSB) was announced. This Board was tasked with creating a global baseline for sustainability reporting so that comparisons in tackling sustainability and climate change can be made between different countries.

In 2023, the ISSB completed the first two international standards:

• IFRS S1: General Requirements for Disclosure of Sustainability-related Financial Information

• IFRS S2: Climate-related Disclosures

As a result, the UK Government announced in 2024 that it would translate these international requirements into UK Sustainability Reporting Standards that would be used to guide UK companies reporting on material sustainability and climate-related risks and opportunities. 

In June, the Government published a draft UK version of these two ISSB standards for consultation with businesses. These standards focus on seven key principles:

1. Materiality

Reporting should focus on information that is genuinely significant to the organisation’s objectives, performance, and long-term resilience. 

2. Stakeholder Inclusiveness

Considering the needs and expectations of various stakeholders, including investors, when determining what to disclose. 

3. Accuracy

Ensuring the reported information is factually correct and avoids misrepresentation. 

4. Clarity

Disclosures should be easily understandable and avoid technical jargon. 

5. Comparability

Enabling users to compare information across different organisations and over time. 

6. Timeliness

Reporting information in a timely manner to support decision-making. 

7. Reliability

Ensuring the information is trustworthy and can be relied upon.

The consultation will close on 19 September, after which the final version of the SRS will be produced.

How the SRS will impact your business

Initially, at least, adoption of the SRSs will be voluntary – although, depending on the outcome of the consultation, they could be made mandatory for large companies and those listed on the stock exchange. The Government is considering whether to introduce mandatory reporting for large companies through legislation under the Companies Act 2006.

At this stage, there is no intention of requiring SMEs to adopt the standards. 

However, businesses that supply large companies with products and services (for example, hotels and attractions that host corporate functions) may find that they are indirectly affected, as larger companies seeking to comply with the standards require businesses they engage to meet the same standards. It is also possible that large financial institutions may require businesses that they fund to comply with the standards, so they can show that they are funding environmentally responsible businesses.

In the longer term, it is likely that reporting against environmental standards is likely to become normal business practice and the development of guidance on the SRS  aimed at SMEs is already being explored. 

It is therefore important that businesses of all sizes understand that reporting on what they are doing to increase sustainability and reduce their contribution to climate change is on the horizon and think about what they can do to improve their performance when planning considering future develop and investment.

There are two recent changes to equality legislation that tourism businesses need to be aware of and, if necessary, take steps to ensure compliance.

Supreme Court ruling

The first, and the one most likely to require businesses to take action on, is the recent Supreme Court ruling on the definition of sex in the Equality Act 2010.

The Court ruled that ‘sex’ is defined as biological sex and that if somebody identifies as trans, they do not change sex for the purposes of the Act, even if they have a Gender Recognition Certificate (GRC).

The main implications of this for businesses relate to the provision of toilets. The following interim guidance has been published by the Equality and Human Rights Commission:

• Trans women (biological men) should not be permitted to use the women’s facilities and trans men (biological women) should not be permitted to use the men’s facilities

• In some circumstances the law also allows trans women (biological men) not to be permitted to use the men’s facilities, and trans men (biological woman) not to be permitted to use the women’s facilities

• Where facilities are available to both men and women, trans people should not be put in a position where there are no facilities for them to use

• Where possible, mixed-sex toilet, washing or changing facilities in addition to sufficient single-sex facilities should be provided

• Where toilet, washing or changing facilities are in lockable rooms (not cubicles) which are intended for the use of one person at a time, they can be used by either women or men

A consultation on updated guidance has recently ended and will be published shortly. It is important to note that trans people remain protected by the Equality Act 2010 under the protected characteristic of Gender Reassignment.

European Accessibility Act

The second piece of legislation to be aware of, although it will not impact on most small businesses, is the European Accessibility Act. This new legislation came into effect on 28 June 2025 with the aim of improving the accessibility to certain products and services for disabled people. 

The Act requires that businesses implement specific accessibility provisions related to how the information, product or service is provided. For example, self-service terminals are required to provide text-to-speech options in order to provide better accessibility for people with visual impairment.

Although the UK is no longer part of the European Union (EU), this legislation covers all businesses outside of the EU that are selling services to EU customers.

The products and services cover by the Act are mostly related to electronic systems and services such as TV and computing, banking and payments and the provision of online information. However, there are a couple of services included in the Act that may impact tourism businesses, including the provision of information and ticketing for all forms of public transport.

To be impacted by the legislation, a business would have to be specifically targeting EU customers, rather than just providing information or ticketing for UK customers on a website that EU customers can access. In addition, the Act also provides an exemption for businesses with fewer than 10 employees and a turnover of less than 2 million Euros.

As such, the legislation will probably only impact larger attractions, transport operators and Local Visitor Economy Partnerships.

The Furnished Holiday Letting Rules (FHL Rules), which determine the tax treatment of self-catering businesses, come to an end on 6 April 2025. This could have significant implications for many operators.

To briefly recap, the FHL Rules stated that if your property is available for holiday letting for at least 210 days a year and you actually let the property for a minimum of 105 days a year, then HMRC would consider this to be a “trading business” and subject to normal business tax rules.

These include:

• Being able to offset expenditure, including mortgage interest, against income;

• Being subject to the business asset treatment in relation to Capital Gains Tax and Inheritance Tax;

• Being subject to business rules for capital allowance expenditure.

With the removal of the FHL Rules, HMRC will now deem a self-catering business to be a “property investment business”. This is the designation applied to rental properties let through a tenancy agreement and means that the tax treatment of a self-catering property will be the same as that for a buy-to-let property. As such, the tax benefits of being deemed a trading business will no longer apply.

This means that as of 5 April 2025, mortgage interest relief will be restricted to the basic income tax rate (20%) for all operators, capital allowances will be replaced with relief for replacing domestic items, there will no longer be business Capital Gains Tax relief and, importantly for self-catering operators who are building up their pension, income from their self-catering business will no longer be deemed “qualifying income” when determining pension relief  and state pension contributions.

However, the Government has acknowledged that this sudden removal of the FHL Rules would unfairly impact existing self-catering business operators. Therefore, transitional arrangements have been announced that will allow existing self-catering businesses to continue to benefit from certain reliefs. These transitional arrangements will allow operators to benefit from capital allowances on expenditure that has already been incurred and any losses generated by the business can be carried forward and off-set against other property rental income.

In addition, various existing reliefs such as roll-over relief, business asset disposal relief, gift relief, and exemptions for disposals by companies with substantial shareholdings will remain, provided that certain conditions are met.

Finally, business asset disposal relief will continue to apply to a disposal that occurs within three years of the self-catering business ceasing to trade.

It is strongly recommend that all self-catering operators discuss the implications of the removal of the FHL Rules with their accountant, to ensure that they are in the best possible position to continue to invest in, and grow, their business.

New reporting rules for digital platforms were introduced in 2024 to help ensure that businesses that generate income through selling products and services through intermediary digital platforms (such as Ebay, Airbnb and Deliveroo) pay the correct level of tax.

While the onus is on the individual business to pay the correct level of tax, the rules require the operator of the platform to collect data on individuals and businesses making sales through their platform and pass that information to HMRC.

Determining whether you are a Reporting Platform Operator

Under the rules, a ‘digital platform’ is defined as a website or app that acts as an intermediary, connecting buyers to sellers and where the operator of the platform knows (or can easily know) the price at which the goods were sold. As such, it does not cover websites that are operated by people or businesses selling goods or services directly to customers. Nor does it include websites that simply provide links through to individuals or businesses that then sell direct to the customer.

The operator of a digital platform is deemed to be a ‘Reporting Platform Operator’ that must comply with the rules if it:

• Resides in the UK, or

• Is managed under UK laws, or

• Has a place of management in the UK

and

• Allows sellers to profit from sales made through the platform;

• Has “reportable sellers” using the platform.

‘Reportable Sellers’ are individuals or businesses that:

• Reside in the UK or another country following the rules;

• Actively supply or are paid for goods or services on the platform.

However, there are some exemptions to ‘Reportable Sellers’:

• Businesses with more than 2,000 property rentals per year on the platform; 

• Sellers that are government entities;

• Businesses whose shares are traded regularly on a stock exchange;

• Sellers making fewer than 30 sales and receiving less than £1,700 for those sales in a year.

Operators of platforms that are outside the UK and/or do not allow have reportable sellers are deemed to be ‘Excluded Platform Operators’.

All operators of digital platforms must inform HMRC whether they whether they are a ‘Reporting Platform Operator’ or an ‘Excluded Platform Operator’.

Rules for reporting platform operators

If you are a ‘Reporting Platform Operator’, you will need to: 

• Collect information about sellers on your platform;

• Collect information about any property listed on your platform (if applicable); 

• Verify the information collected (known as ‘due diligence’); 

• identify reportable sellers.

In terms of individuals who are selling products and services on your platform, this means that you have to collect the following information:

• The person’s full name;

• Their main address;

• Their date of birth;

• Their National Insurance number (or tax identification number and country of issue if the live outside the UK).

In terms of businesses that are selling products and services on your platform, this means that you have to collect the following information:

• The business’s legal business name;

• The main business address;

• The company registration number (or tax identification number and country of issue if the company is based outside the UK);

• If the seller is a UK partnership, you’ll need their partnership Unique Taxpayer Reference (UTR).

For both individuals and businesses, you need to collect the following information if available to you:

• Any other tax identification number (like a VAT number) and where it was issued;

• The country the seller lives in;

• The total amount paid to the seller for the reporting year; 

• The number of transactions the seller received payment for;

• Any fees, commissions, or taxes you have withheld or charged;

• Bank account details to which amounts were paid.

Due diligence and reporting

Reporting platform operators must undertake due diligence to ensure that the information supplied by reportable sellers using their website is correct. While this can be done either “in house” or by a third party, the Reporting Platform Operator remains responsible for the accuracy of the information provided to HMRC.

The information on “reportable sellers” needs to be provided to HMRC via their online reporting system by the 31 January of the year after the collection year (i.e., the information for 2024 has to be provided by 31 January 2025). Failure to meet this deadline could result in a penalty of up to £5,000 and an ongoing penalty of £600/day.

As it applies to tourism businesses

Most tourism businesses sell their products and services directly to customers and therefore will not be impacted by these rules. Similarly, tourism businesses that simply provide links to other individuals or businesses will not be impacted as they are not involved in the sales process.

However, there will be some tourism businesses that provide a platform on which individuals and businesses can sell of good and services and therefore will need to comply with the rules. 

Most tourism-related booking sites will meet the requirements of a Reporting Platform Operator, as will any destination website that has a ‘shop’ or booking page where customers can directly purchase products and services from third parties such as accommodation, experiences and travel. 

Further information

Further information on the rules and how to comply are available on the HMRC website.

1 October 2024 saw the commencement of the new Employment (Allocation of Tips) Act 2023. 

This legislation replaces an old Code of Practice on the treatment of tips, following complaints that a significant number of businesses were not complying with this voluntary code.

The main requirements of the new legislation are that business operators must:

1. Pass on all qualifying tips and service charges to workers without deductions, except in very limited scenarios, such as deduction of income tax. This must be done, at the latest, by the end of the month following the month in which the tips are paid by customers (for example, a tip received on 14 June must be paid by 31 July);

2. Ensure that tips are distributed in a fair and transparent manner when the employer takes control, or exerts significant influence, over their distribution;

3. Have regard to the Code of Practice on Fairness and Transparent Distribution of Tips when distributing or influencing the distribution of tips;

4. Maintain a written policy on how tips are dealt with at their place of business, and ensure this policy is made available to all their workers;

5. Maintain a record of all tips paid at their place of business and their allocation and distribution between each worker, to which workers have the right to request access.

“Qualifying tips” means any tip, gratuity or service charge received by either the employer or staff that are subject to employer control. This can also include items of a set value (such as a customer buying a member of staff a drink or a bottle of wine) as well as usual monetary tips.

The method of payment in which the tip is received (i.e. cash, card or electronic payment) is not relevant to whether it is deemed to be a qualifying tip. Nor is whether the tip is added to the bill or paid separately to the bill.

Under the legislation, employers are deemed to exercise control or significant influence over tips if either they tell staff how to distribute tips (such as if there is a company policy for how tips are distributed) or if they collect tips and distribute them, whether this is at the end of a shift or as part of the regular payroll.

Tips that are not subject to employer control (for example where staff receive and keep tips that they receive directly from customers) are not deemed to be qualifying tips. It is possible that both qualifying tips and non-qualifying tips will be received in many premises – for example, where the operator receives the service charge but the staff get to keep any additional tips they receive.

Once you have determined what are deemed to be qualifying tips, the legislation requires employers to ensure that these are allocated fairly between workers (including part-time, seasonal and agency workers) and that you have regard to the Government’s Code of Practice when developing and implementing a system to achieve this.

In doing so, it is important to note that the Act requires employers to pass on the full amount of all qualifying tips. This means that all administration costs have to be paid by the employer, including all costs associated with processing the tips, such as charges applied by credit and debit card companies.

Allocating and distributing tips fairly does not require employers to allocate the same proportion of tips to all workers. Employers can allocate different proportions of the tips to different workers but need to ensure that they give due consideration to all of the workers involved in providing services to customers and use a clear and objective set of factors to determine the allocation and distribution of tips. 

The choice of factors should be fair and reasonable given the nature of the business and could include:

• Employee role (for example, different distributions between front of house and backroom workers)

• Basic pay (and how workers are engaged)

• Hours worked during the period when tips are received

• Individual and/or team performance

• Seniority / level of responsibility

• Length of time employed

• Customer intention

Employers need to take care to ensure that the distribution policy they develop complies with the Equality Act by not discriminating between people with protected characteristics, either directly or indirectly. For example, if staff with protected characteristics are more likely to be employed in positions that receive a lower distribution, this could constitute indirect discrimination. 

To ensure a fair and transparent distribution policy is developed, you should consult with employees and regularly review the resultant policy to ensure that it continues to meet the requirements of the Act. Your tipping policy must be written down and include information on how tips are accepted, allocated and distributed, as well describing steps you will take to ensure all tips are handled fairly and transparently in accordance with the Act. A copy of this policy must be distributed to all employees.

How you distribute tips to staff is up to you. You can distribute tips directly to staff as cash, through your payroll system, or you can appoint a tronc arrangement (either in-house or through an independent tronc operator). If you appoint a tronc manager, you still remain responsible for the fairness of the distribution and must act if it is found that the distribution is being made in an unfair manner. You also remain responsible for ensuring that the distribution is made within the timeframe set out by the legislation (by the end of the month after the month in which the tip was received).

Finally, you must keep a tipping record which includes details of all qualifying tips received and the amount allocated to each worker. This record must be maintained for a period of three years beginning with the date on which the tip was paid. Employees have the right to make a written request – limited to one request per worker in a three month period – to view the tipping record for a period dating back up to three years, provided they worked during the period requested.

Allergies or intolerances to food products is becoming increasingly common. Anybody associated with preparing, selling and serving food must be made aware of the ingredients in food that is produced and served on the premises.

As customers can be allergic or have intolerances to a wide variety of ingredients, it is important that staff serving the food have access to the full list of ingredients for each product served.

Above this, there are 14 allergens that you are legally required to declare if they are present in food. These are: 

• Celery;

• Cereals containing gluten (such as wheat, rye, barley, and oats);

• Crustaceans (such as prawns, crabs and lobsters);

• Eggs;

• Fish;

• Lupin;

• Milk;

• Molluscs (such as mussels and oysters);

• Mustard;

• Peanuts;

• Sesame;

• Soybeans;

• Sulphur dioxide and sulphites (if the sulphur dioxide and sulphites are at a concentration of more than ten parts per million);

• Tree nuts (such as almonds, hazelnuts, walnuts, brazil nuts, cashews, pecans, pistachios and macadamia nuts).

The requirement to declare these allergens also applies to any additives, processing aids and any other substances which are present in the final product. So if you use any ingredient that, in itself, includes one of these allergens (e.g. a sauce or flavouring), this must also be declared.

Declaring allergens

There are different requirements on how to declare the presence of these 14 allergens, depending on whether the food you are providing is prepackaged or non-prepackaged.

Prepackaged food

Packaged foods are defined as any food that is ready for sale either fully or partly enclosed by the packaging and cannot be changed without opening or changing the packaging. This would include things like sandwiches, salad bowls and individually packaged drinks in a chiller cabinet.

Prepacked food must have an ingredients list present on the packaging. Allergens present in the product must be emphasised each time they appear in the ingredients list (often by being printed in a bold font).

Non-Prepackaged Food

Non-prepackaged food includes items sold separately behind a counter, such as pies and cakes, or foods packaged behind the counter when they are sold such as curries, food provided at self-service buffets and food served off a menu to eat in the premises or to take away.

If you provide non-prepackaged foods, you must supply allergen information for every item that contains any of the 14 allergens. There are a range of ways to declare allergens and you should determine the method that best fits with the way that you provide food to customers.

 Examples of how this information can be provided include:

• On the menu or chalkboard;

• On the individual card notices that are used to provide the name/price of the product. This must be done for every different product, even where all products are the same price or where customers can help themselves to different products at a set price such as at a buffet;

• On an information sheet that can be provided to customers;

• Verbally by staff.

When staff provide the information verbally, it is important that this is supported by written information, to help ensure that the information is accurate and there is no misunderstanding.

Good practice

An important component of ensuring the safety of customers is the adoption of good practice regarding allergen management.

There are three main components to this:

Allergen ingredient recording

All food products and recipes need to be standardised with set ingredients and written recipes that record all allergens.

Avoiding cross-contamination

Care must be taken to ensure that cross-contamination does not occur during the preparation or serving of food products. Steps to do this include:

• Cleaning utensils used to prepare a food product containing allergens before using them to prepare another product;

• Ensuring that utensils used to serve a food containing an allergen are not used to serve any other food or are thoroughly cleaned between usage;

• Washing food preparation surfaces and hands thoroughly between preparing dishes;

• Storing ingredients and prepared foods separately in closed and labelled containers;

• Keeping ingredients that contain allergens separate from other ingredients.

It is important to note that cross-contamination can also occur through using the same cooking oil to cook foods containing allergens (e.g., fish and chips that include gluten) and those not containing allergens.

If you can’t guarantee that you have avoided cross-contamination in food preparation, you should inform customers that you cannot provide an allergen-free dish.

Training

All staff involved in the preparation and sale of food products need to be trained on the legal requirements related to managing allergens, the information that needs to be provided to customers and how to respond to allergen information requests. Specifically, they should know:

• How and when allergen information must be provided;

• How to handle allergen information requests;

• How to guarantee that allergen-free meals are served to the right customer;

• How to prevent allergen cross-contamination when handling and preparing foods.

The Food Standards Authority provides a free online allergen training course for businesses in English and Welsh. The course consists of six modules, each with a test at the end. Staff that pass these tests can then download their continuing professional development (CPD) certificate. 

Further information

For more information on allergens and your legal obligations, see the Food Standards Authority website.

You can also find more information in the sections on food safety and hygiene and food labelling within the Pink Book Online. 

Self-catering operators will have seen in the Budget announcement on 6 March that the Chancellor announced proposals to remove the Furnished Holiday Letting (FHL) rules from 5 April 2025.

To understand the impact of this proposal, it is a good idea to provide a recap on the FHL rules and why they were first introduced in 1983.

There are different ways by which you can supply accommodation. At one end of the spectrum, you have properties that are let as residential accommodation under a short-term assured tenancy agreement (the standard landlord and tenant situation). In these properties, tenants have certain rights over the ability to stay in the accommodation and what they can do on the premises. The income that landlords derive from these properties is deemed by HMRC to be income from ‘Property Investment’ and, as such, there are certain rules as to what landlords can claim in terms of expenses and how the property is treated in terms of Capital Gains Tax and Inheritance Tax.

On the other end of this spectrum you have hotels, where the customer has no rights over the property (they have a licence to occupy rather than a tenancy agreement) and for tax purposes, the income is deemed to be from ‘Trading’ rather than ‘Property Investment’. This means that the tax treatment of income is very different. For example, all expenses can be written off against income before tax is paid on the profit, there are different Capital Gains Tax and Inheritance Tax treatments and income from the business is deemed to be qualifying income in terms of pension contributions.

The FHL rules were originally introduced to resolve the question of at what point along this spectrum, between residential tenancies and hotels, does a property change from being a ‘Trading Business’ to being a ‘Property Investment Business’. The criteria set in the FHL rules is that if the property is available for at least 205 days a year and let for at least 105 to people who stayed no longer than 30 days at a time, then the property was a ‘Trading Business’ akin to a hotel, but if it failed to reach this criteria, it was deemed to be a ‘Property Investment’ business more akin to a residential letting.

At face value, the proposal to abolish the FHL rules means that income from self-catering properties will, in future, be deemed to be income from ‘Property Investments’ and the tax treatment of this income will be the same as for Buy-To-Let properties.

However, the details of the proposal are yet to be announced and the Office for Tax Simplification, which recommended the removal of the FHL rules, also recommended that there should be a test to determine whether certain self-catering businesses could still be deemed to be ‘Trading Businesses’ under the new legislation. 

The Government has stated that it will publish draft legislation on the new rules at some stage in 2024. When this is produced, we will have a clearer understanding of the impact of the removal of the FHL rules on different self-catering business types.

The new Digital Markets, Competition and Consumers Bill has reached the Committee stage in the House of Lords, meaning it should soon achieve Royal Assent and become law.

While this is a very large and wide-ranging Bill, there are a couple of sections that tourism businesses need to be aware of, as the Bill updates and strengthens UK consumer protection law.

Part 3 will enable courts to impose monetary penalties on traders who breach consumer laws and provide the Competition and Markets Authority (CMA) with new powers to investigate and take enforcement action, including imposing monetary penalties on businesses that do not comply with consumer protection laws or CMA directions.

Part 4 will revoke the current Consumer Protection from Unfair Trading Regulations 2008 (CPRs), which are EU based and, essentially, re-establish the protections of the CPRs into this new Act.

Importantly, the Government is taking this opportunity to amend and add to the protections currently provided by the CPRs, as well creating a new power to make new regulations that could add further protections in future. 

In terms of the new consumer protections that will be introduced with the passing of this new Bill, there are two that tourism businesses need to be aware of and take action to ensure you are compliant.

1. Banning fake reviews

One of the main additions to the list of banned practices being transferred over to the new legislation is a ban on fake reviews. This means that websites such as TripAdvisor, Hotels.com or Booking.com will be accountable for any fake reviews posted on their platform. However, it also means that businesses that host reviews on their own websites must also put measures in place to ensure that the reviews are genuine.

Over the next few of months, the CMA will be developing and publishing new guidance on the processes business will need to put in place to prevent and remove fake reviews. In the meantime, you should review any existing reviews on your website and ensure that these reviews can be proven to be genuine.

2. Restricting drip feeding of prices

A second addition to the list of banned practices will be ‘Drip Pricing’. This is the practice of showing customers an initial price for a service or goods and then adding further fees or charges during the purchase process, so that the final price the customer pays bears little resemblance to the initial price promoted.

Research by Government shows that 56% of businesses in the hospitality sector undertake ‘Drip Feeding’. The Government deems some drip-feeding practices to be reasonable - for example, when customers add optional extras to their initial purchase such as adding a welcome pack when booking a self-catering cottage or an animal feeding experience when visiting a zoo. These will remain legal.

However, the new legislation will ban mandatory additional charges that consumers can’t avoid paying during the purchase process. This could include charges such as cleaning fees when staying in self-catering properties or booking charges when buying tickets to an attraction or theatre show.

Businesses will have to include all charges that consumers cannot avoid in headline prices so that it is possible for the customer to purchase the product or service for the advertised headline price.

While it will take time for these new provisions to come into effect, you should take this opportunity to review your pricing and purchasing process now to make sure that any mandatory charges are included in headline prices.