Furnished holiday let tax is due for a huge overhaul in the next budget.

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Budget plans to scrap tax breaks for furnished holiday let owners are on hold as the government ‘horse traded’ policies in a bid to get the Finance Bill through Parliament before the end of the week.

One of several tax advantages of renting out a second home as a furnished holiday let is owners could offset the costs against other income, like employment income, reducing their overall tax bill,  adding up to an average saving of £4,000 a year.

Other tax savings involve capital gains tax reliefs on the sale of a property.

Parliament is dissolved on Friday, so any business that is urgent has to pass before the House of Commons before the end of the day’s sitting.

If the government had attempted to pass all business, the other parties could have played out the time that might have meant policies considered more important to Labour would not have gone to a vote.

To stop this impasse, Labour has agreed to drop some parts of the Finance Act so the Tories don’t block the way through Parliament.

Chancellor Alastair Darling announced the plan to scrap tax breaks for holiday lets from April 1.

Now the plans expire on June 30 – along with those for extra duty on some ciders and the 50p levy on homes for broadband.

The Tories have pledged not to resurrect them – but Labour have stayed quiet.

If Labour wants to carry on with abolishing the tax breaks, they will have to pass another Finance Bill following the election or leave the amendment until the next Budget.