Glamping is a popular camping experience which offers guests the chance to have a breather without completely abandoning the more comfortable aspects of life.

If you have a farm or some land, it could be the perfect venture. But what about paying taxes on your property income? In this blog we’ll discuss glamping in more detail, along with your tax obligations and what tax allowances and reliefs you might be able to claim if you launch your own glamping business.

What is glamping?

We’ve all heard of camping. Those of us that have partaken in a bit of camping will know it can sometimes be muddy, wet, and not always very comfortable.

‘Glamping’ on the other hand adds glitz and glam to camping. It offers a more five-star feel with luxury facilities you might not find staying in a bivouac in the woods. It’s increasingly popular and diverse, which makes it a great business idea – especially if you already have an accessible location!

What types of glamping experience I can offer?

Glamping can describe pretty much anything from large tents and fancy caravans to boutique shepherding huts. Other examples include:

• Tipis
• Yurts
• Tiny houses
• Treehouses
• Bubble domes

It really depends on your location and whether you have the planning permission, as well as your budget. You could (depending on the size of your glamping site) set up tipis in one area, and bubble domes for stargazing in another. As long as you’re putting the ‘glam’ in ‘glamping’ you’ve succeeded.
 

Do I need planning permission to set up glamping pods?

If you plan to operate for longer than 28 days, then the answer is yes. In the UK you can run temporary glamping or camp sites for up to 28 days each year without needing any planning permission.

Of course, like anything, there are things you won’t be able to do within this timeframe. For instance, you can’t lay any concrete bases or install treatment plants.

28 days could be a great ‘trial run’ before you begin the planning permission process, but there are restrictions on what you can do so this might limit your vision in the short-term – especially if you’re really going for that luxury feel.

Do I still need planning permission if I already have land and accommodation set up?

Even if you don’t need to develop your land to start a glamping site, you’ll still need planning permission.

Will I need to pay tax on glamping income?

You may well need to pay tax on your glamping and property income, depending on the tax bracket your profit falls into. The type of tax you need to pay, and how you submit your tax returns will depend on the business structure you choose (which we’ll cover next).

It’s worth checking whether or not you’re entitled to property allowance, too. You may be able to receive up to £1,000 of property income in a tax year without needing to tell HMRC or pay tax on it.

Choosing a business structure for your glamping business

Being ‘self-employed’ isn’t a legal business structure in itself – it’s more about the way you work rather than what your business is. Choosing a legal structure will dictate how you operate your business, as well as the type of taxes you’ll pay. We go over some of the most common examples below.

Sole Trader

A sole trader essentially means you are the business. You’re self-employed, and you’ll benefit from keeping all your profits after tax. It’s fairly straightforward, and you’ll pay income tax and National Insurance depending on how much you’ve earned by submitting a tax return – either Self Assessment or an MTD Income Tax Return.

On the other hand, that lack of legal separation between you and your sole trader business means you’ll end up being personally responsible for any liabilities or debts of the business. It’s worth thinking about – especially if you’re taking out any loans or funding to help you develop glamping locations.

Limited company

A great benefit to setting up a limited company is making yourself both a director and a shareholder of the business. This means you can pay yourself a combination of a salary and dividends – which can sometimes be more tax efficient depending on your circumstances and earnings.

Your liability is also ‘limited’ because the business is a separate legal entity, so the company’s debts aren’t yours personally. Running a company can seem like more effort than being a sole trader though, because of the extra admin involved. You’ll need to submit tax returns and accounts for the business as well as a Self Assessment to declare any untaxed income such as dividends.

A partnership

This can be beneficial if you’d like to run your glamping business with someone else. There are different types of partnerships too. For instance, your partnership could be ‘incorporated’ as a Limited Liability Partnership (LLP) which provides the same protection in terms of liability as a limited company.

Another option is to run it as a ‘general’ partnership, which is less formal so you won’t need to register with Companies House.

We have guides available for both Limited Liability Partnerships and general partnerships.

How can I reduce the tax bill for my glamping business?

Paying taxes as a small business can be stressful, but thankfully there are ways to manage the amount of tax you need to pay, such as claiming capital allowances and expenses.

Capital allowances

Capital allowances can help reduce the tax you need to pay if you’ve purchased assets for your business, but this depends on what sort of asset you buy. The rules around capital allowances for the glamping industry will also depend on what sort of glamping pods you provide!

For example, if your glamping pod is not fixed to the ground (so you could move it if you wanted), you may be able to claim for plant and machinery capital allowances under the annual investment allowance (AIA). Glamping pods that qualify are usually more basic, and not substantial enough to be classed as a building.

More well-equipped glamping pods that are fixed to the ground and are viable to live in (for example, because they have a fitted bathroom, kitchen, living room and bedroom) are more likely to be classed as buildings, and therefore not eligible for capital allowances.

Claiming expenses

Most businesses are able to claim expenses on anything used “wholly and exclusively” for their business. To give you some examples, your allowable costs could include marketing and advertising, cleaning, and insurance – so record absolutely everything and speak with an accountant if you’re not sure.

 
Need help with your taxes? Learn more about our online accounting services by talking to one of the team on 020 3355 4047 or get an instant quote.