In this guide
- Costs come in two kinds: fixed costs that arrive whether or not the home is booked, and per-stay costs that rise and fall with bookings.
- You pay the bills, insurance, supplies, upkeep and safety checks. Guests pay for cleaning and linen through the cleaning fee, and the platform and management fees come out of bookings.
- A home let mainly to paying guests can count as a business for energy and, in England, for water, so check which contracts apply before you sign up to new ones.
Fixed costs and per-stay costs
Every running cost of a short let falls into one of two groups, and knowing which is which is the first step to a budget that holds up. Fixed costs arrive whether the home is booked or empty: council tax or business rates, insurance, broadband, the TV licence, the standing charges on your energy, safety checks and your accountant. Per-stay costs move with bookings: the energy and water guests use, the supplies they get through, wear and tear, and the fees taken from each booking.
The difference shows in a quiet month. It still brings an insurance payment and a broadband bill, but little in booking fees, because those only arise when a booking does. Your fixed costs set the floor: the income you need each month before the let pays its way.
Who pays for what
Each cost has a clear owner, and most of the bills sit with you, as they would for any home you own.
Cleaning is the one large cost that does not land on you. Guests pay a cleaning fee on top of the nightly price, and with Perfect Booking that fee pays for the clean and for washing the linen. We manage the cleaners and pay them from it.
We ask before we spend. We usually check with you before any cost over £100, and tell you about smaller costs where we can.
Energy and water
Energy is usually the largest bill you carry, and it runs higher than for the same home lived in. Guests turn the heating up, take long showers and run the dishwasher and tumble dryer freely, and the heating also runs between stays while the home is cleaned and warmed for the next arrival. Long winter stays keep a home busy when heating costs most.
A smart thermostat with a maximum setting, hot water on a timer and a low setting between stays all trim usage without guests noticing.
Domestic or business contract. Domestic energy contracts are for homes, so a property run mainly as a short let can count as a business supply. If it pays business rates, that is strong evidence it is no longer mainly a home: tell your supplier how it is used and ask which contract applies.
Read a business energy contract before you agree to it. Ofgem’s price cap only covers domestic customers. Business contracts have no cooling-off period, often roll over for another 12 months if you miss the end date, and out-of-contract or deemed rates are usually dearer than a fixed deal. Put the end date in your diary.
Water follows the same idea. On a meter, the bill rises with every shower; without one, it is a fixed charge. In England, a property whose principal use is no longer as a home belongs in the business water market, where you buy from a water retailer. Ofwat, the regulator, looks at actual use, with business rates and council tax as evidence, and has found a home used mainly as a holiday let to be a business premises. A home on business rates and let most of the year is likely to be a business customer; one let now and then on council tax usually is not. Wales and Scotland run different systems, so check with your water company.
Broadband, TV licence and council tax
Broadband is a fixed monthly bill, and it is not one to skimp on. Guests mention slow wifi in reviews, work guests rely on it, and smart locks, thermostats and noise monitors often need it too.
TV licence. If guests can watch live TV or use BBC iPlayer, the address needs a licence, and that falls to you: TV Licensing says holiday-let guests are covered by the licence registered to the property. If you let several units, TV Licensing’s hotel and mobile units licence covers up to 15 of them for one fee, provided most stays are for fewer than 28 nights in a row.
Council tax or business rates depends on how much the home is let. In England, a self-catering home is assessed for business rates if it was available to let for at least 140 nights in the last 12 months and actually let for at least 70, and you plan to make it available for 140 nights in the next 12. Wales sets the bar much higher. A home on business rates no longer pays council tax, and in England a single property with a rateable value under £15,000 may get small business rate relief. A home that misses the tests stays on council tax, and if no one lives there as their main home, many councils in England now add a second homes premium of up to 100%.
Our guide to council tax or business rates covers the tests, the evidence councils ask for and the Welsh rules in detail.
Insurance, supplies and upkeep
Insurance is a fixed annual cost. A standard home or landlord policy often does not cover paying guests, so you need specialist short-let insurance that covers the building, contents and public liability for guest stays. Our guide to insurance for short lets explains what to look for.
Supplies are a steady per-stay cost. Guests expect the basics to be there when they arrive, and they get through them faster than you might think:
- Toilet roll, hand soap, shampoo and shower gel
- Tea, coffee, sugar and a few cooking basics such as salt, pepper and oil
- Washing-up liquid, dishwasher tablets, sponges and bin bags
- Cleaning products guests can use during a longer stay
Repairs and maintenance come faster with many short stays than with one household: a loose tap, a sticking lock, a tired extractor fan. We arrange repairs, and if a guest caused the damage, our guide to when a guest damages your home explains the claim.
Replacing worn items is the cost owners most often forget. Mugs, glasses, pans, mattress protectors, kettles and toasters all wear out or go missing, and sofas, mattresses and flooring follow in time. Setting a small amount aside each month for replacements stops one bad month from swallowing the profit.
Safety checks and servicing
Paying guests bring legal duties. Gas checks are the law for any let home, and fire safety law applies because a home with paying guests is not treated as a private dwelling. These are fixed costs, so diary them for the year.
| Check | How often | Who does it |
|---|---|---|
| Gas safety check on every appliance and flue | Every year | A Gas Safe registered engineer |
| Heating and hot water service | Every year | A qualified heating engineer |
| Fixed electrical installation | At least every five years | A competent electrician |
| Portable appliances, such as kettles and lamps | Check regularly | You, or a competent person |
| Smoke and heat alarms | Test monthly; replace at end of life, around 10 years | You, or someone on your behalf |
| Fire risk assessment | Keep a written record; review when anything changes | You, or a fire risk assessor |
| Fire extinguishers and emergency lighting, if fitted | Serviced every year | A competent contractor |
Based on the Home Office guide for small paying guest accommodation in England. Wales, Scotland and Northern Ireland have their own fire safety rules.
Our guides to fire safety and gas and electrical checks go through each one.
Fees and accountancy
Two costs come straight out of bookings: the platform’s commission and our management fee of 15% plus VAT, worked out on what the platform pays out. Our guide to what management costs sets out how a booking is split.
Accountancy is a fixed yearly cost that now matters more. Making Tax Digital for Income Tax, with digital records and quarterly updates to HMRC, has applied since 6 April 2026 if your qualifying income from property and self-employment, before expenses, was over £50,000 in 2024 to 2025. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028. Our itemised monthly statements give your accountant every booking and cost on its own line.
Most of the costs in this guide are allowable expenses that reduce your taxable rental income: utilities, council tax, insurance, services such as cleaning, agent fees, accountancy and repairs. The first furnishing of the home is not, but like-for-like replacements of furniture, appliances and kitchenware can qualify for replacement of domestic items relief. Our guide to tax on short-let income explains more, and your accountant can confirm how the rules apply to you.
Budgeting, and how it compares with a long let
The biggest change from a long let is who holds the bills. With a tenant, the tenant usually pays energy, water, broadband and council tax, and your costs are mostly insurance, safety checks, repairs and the agent’s fee. With a short let, those bills move to you, along with supplies and faster wear.
That does not make a short let the weaker choice; it means you should compare the two on what you keep after costs, not on the headline rent. Our guide to short let or long let works through that comparison. To build your own budget, gather these before you start:
Put the fixed costs in first as a monthly figure, then add per-stay costs for a busy month and a quiet one. If the quiet month still covers the fixed costs, the budget is sound.
Questions owners ask
Can I charge guests separately for the energy they use?
Not on a normal stay. Guests expect bills to be included, so energy is covered by the nightly price rather than added as a separate charge. That is why keeping usage in check matters.
Do I still pay council tax if the home is on business rates?
No. A self-catering home assessed for business rates comes off council tax, and you pay business rates instead. In England you may get small business rate relief if it is your only business property and its rateable value is under £15,000.
Do I need a TV licence if there is no TV?
Not if nobody watches or records live TV or uses BBC iPlayer at the address on any device. TV Licensing says guests may be covered by their own licence when they use a device that is not plugged into the mains, but anything plugged in at the property needs the property’s licence.
Are running costs tax-deductible?
Most are. Bills, council tax, insurance, cleaning, agent fees, accountancy and repairs are on HMRC’s list of allowable expenses for rental income. The first furnishing is not, but like-for-like replacements can be.
Who pays if a guest breaks something?
Every guest pays a damage deposit or a damage waiver before check-in. If something is damaged, we arrange the repair and handle any claim.
- GOV.UK: business rates for self-catering and holiday let accommodation
- GOV.UK: working out your rental income, allowable expenses
- GOV.UK: check if you’re eligible for Making Tax Digital for Income Tax
- Ofgem: get a business energy contract
- Ofwat: whether premises used as a holiday let are household premises
- TV Licensing: hotels, hostels, mobile units, holiday lets and campsites
- HSE: gas safety checks, who needs them
- GOV.UK (Home Office): making your small paying guest accommodation safe from fire
