Wales Tourism Alliance/ UK Hospitality Cymru/ Professional Association of Self Caterers UK
Tourism and hospitality organisations have offered the Welsh Government their expert insight to protect legitimate self-catering holiday businesses from unintended consequences of proposals to clamp down on second home ownership in Wales. Wales Tourism Alliance (WTA), UK Hospitality Cymru (UKHC) and Professional Association of Self Caterers UK (PASC UK) are calling on the Welsh Government to heed new evidence collected in a survey of more than 1,500 self-catering businesses, across Wales. The survey, compiled jointly by the three membership organisations, has been sent to all Members of the Senedd, all Welsh MPs, Visit Wales and key stakeholders. It represents the views of a quarter of Wales’ self-catering operators, who own around 8,000 properties. The Welsh Government is proposing stricter rules on self-catering accommodation qualifying for business rates rather than council tax. Currently, self-catering properties in Wales must be available to let for a minimum of 140 days in any 12-month period, and actually let for at least 70 days to qualify for business rates rather than council tax. Under the new proposals, properties must be available to let for at least 252 days and actually let for at least 182 days to qualify for business rates – an increase of 160%. From April 2023, a self-catering business not meeting the new threshold would incur council tax for a second home, instead of business rates. Welsh county councils will have the power to increase council tax on all these business by up to 300%. WTA, UKHC and PASC UK urge the Welsh Government to:
In return, WTA, UKHC and PASC UK are offering to work with Visit Wales to improve the profitability and sustainability of self-catering businesses by driving up quality and nightly yield. They are also keen to work with Visit Wales, Welsh Government and other partners to drive the green, low-zero carbon agenda in the sector. The survey reveals that the proposed occupancy threshold will have a “disproportionate and damaging economic impact” on the self-catering sector, individual livelihoods and communities. The survey findings demonstrate that the proposed changes will not deliver the Welsh Government’s goal of creating more affordable housing in communities where second homes have made property prices too expensive for most local people. The proposals could not have come at a worse time for the tourism industry in Wales, with rapidly rising energy and fuel prices, a cost-of-living crisis, the opening up of overseas tourism, staff shortages, rising employment and procurement costs, the return to 20% VAT and the Ukraine war. Many family-run, micro holiday letting businesses surveyed said they will close if the Welsh Government introduces the proposed changes. The properties could subsequently be sold to buyers from outside of Wales or be re-absorbed into owners’ own homes. A joint statement by the organisations said: “As a tool to bring properties back into a market which is affordable to local people, it will not work. Rather, it will reduce local owners’ ability to earn an income and cause a decline in secondary jobs in hospitality, retail, house maintenance and cleaning. “It will not safeguard the Welsh language as these businesses will be lost to wealthier outsiders prepared to meet the higher costs of having a second home or self-catering businesses in Wales.” “Businesses agreed that the 70-day threshold was too low and have consistently recommended an increased to 105 days. Raising the bar to 182 days will have a hugely detrimental impact on the genuine businesses that operate in the sector. “It is far above average occupancy and will simply drive prices down as owners race to meet the 182 days target. “A decline in the availability of self-catering businesses will deter tourism, on which many hospitality businesses depend. Local pubs, restaurants and other hospitality and leisure businesses will see a severe drop in footfall at key tourist times. "The industry supports higher thresholds to help distinguish between professionally run self-catering businesses and second homes. Unfortunately, these proposals don't reflect the outcome of the Welsh Government's own consultation on the issue and we risk losing valuable, locally-owned, small businesses as a consequence. “We urge the Welsh Government to review their figures and reconsider the damage that these proposals will cause to the economic sustainability of communities they purport to safeguard." Ends Notes for Editors: The Wales Tourism Alliance (WTA) represents around 7,000 businesses in all sectors of tourism industry across Wales. www.wta.org.uk .
0 Comments
On 29 March, the Minister for Finance and Local Government made a statement in the Senedd, outlining the Welsh Government’s plans for NDR reform over the short, medium and longer term. These plans include more frequent revaluations, improvements to the appeals process and the implementation of further measures to tackle fraud and avoidance, as well as continuing to explore the potential for a land value tax to replace NDR in future. A full transcript of the debate which followed the statement is available on the Senedd website.
Retail, Leisure and Hospitality Rates Relief scheme for 2022-23 Retail, leisure and hospitality businesses in Wales will receive 50% NDR relief for the duration of 2022-23. Like the scheme announced by the UK Government, the Welsh Government’s Retail, Leisure and Hospitality Rates Relief scheme will be capped at £110,000 per business across Wales. This means that local authorities will not be able to automatically apply the relief to ratepayers’ bills. Eligible businesses will be required to apply to their local authority for relief and declare that the total amount of relief being claimed from authorities across Wales does not exceed £110,000. Further to our guidance, local authorities are now taking applications for relief under the scheme for 2022-23. We have published links to the application forms for all local authorities on our Business Wales webpages. Letting criteria for self-catering accommodation - Following consultation, the Welsh Government has announced changes to the criteria for a property providing self-catering accommodation to be classified as non-domestic and liable for NDR, rather than domestic and liable for council tax. The views conveyed in the consultation, including those from respondents representing the wider tourism industry, indicated that most genuine self-catering businesses could comply with increased letting requirements. The WTA disagree with this statement. The wording of the following seems to suggest an absolute! We need to provide as much evidence as an industry tot he contrary - 'The Non-Domestic Rating (Amendment of Definition of Domestic Property) (Wales) Order 2022 (“the Order”) will amend the minimum length of time a property is required to be actually let, increasing it from 70 days to 182 days, within any 12 month period. It will also amend the minimum length of time a property is required to be made available to let, increasing it from 140 days to 252 days. A technical consultation on the draft Order is open until 12 April 2022. The Order will be made as soon as possible and the amended criteria will apply to all assessments for the NDR list, from 1 April 2023'. Further information: Comments or enquiries can be directed to: localtaxationpolicy@gov.wales. North Wales MS Mark Isherwood has condemned the impact on legitimate holiday-let businesses of new Welsh Government regulations which will allow local authorities to charge a Council tax premium of up to 300% on second homes in Wales, quoting legitimate North Wales holiday-let business owners who say they will destroy them.
Speaking in yesterday’s meeting of the Welsh Parliament on the Council Tax (Long-term Empty Dwellings and Dwellings Occupied Periodically) (Wales) Regulations 2022, Mr Isherwood told the Finance Minister of the concerns of holiday-let business owners who have contacted him regarding the changes and asked her what Impact Assessments have been carried out of the consequences of these regulations for such businesses. He said: “To justify its announcement that any self-catering business unable to meet its increase to 182 days let annually will be removed from the Business Rate Register and may have to pay a Council Tax premium of up to 300 per cent, your Government stated that respondents to the consultation ‘representing the wider tourism industry, clearly support a change to the criteria for self-catering accommodation to be classified as non-domestic’ and, even more surprisingly, ‘were of the view that the majority of genuine holiday accommodation businesses would be able to satisfy increased letting thresholds’. Of course, since then, we've heard outcry from the sector across Wales. “Concerns have been raised with me by actual legitimate holiday-let businesses, and include: 'I have two holiday lets in the garden of our Gwynedd home. We're open all year, are fully booked during peak season, but usually only have weekend/short-break bookings during the quieter months. I fear we will end up bankrupt.' 'The six holiday cottages that we have adjacent to our home have been in business for 25 years’ and ‘If a business such as ours does not meet the 182 days letting, how could council tax be charged on cottages that have planning permission which states that they can never be residential?’ ‘Our holiday let property is located 6 metres from our front door. Clearly not a second home and all on the same title deed. We have been trading for the past seven years and have exceeded 182 days let in four out of the seven years.’ “So, we need to know what Impact Assessments the Welsh Government has therefore carried out of the consequences for legitimate holiday-let businesses, businesses that were established, in many cases, in response to calls by Welsh Governments since devolution for them to diversify within the rural economy - businesses that have properties that have never and will never be used as second homes.” In her response the Finance Minister stated: “One of the other tools that we will have available to us is the matter of the thresholds for holiday lets. However, that's not what we are debating this afternoon. So, James Evans and Mark Isherwood will have their opportunity to contribute on those regulations in due course. There's currently a technical consultation open for response, so I'm sure that they'll take the opportunity to respond to that technical consultation, which is ongoing currently.” Speaking afterwards, Mr Isherwood said: “It was all well and good for her to state that we were debating an increase in maximum council tax premiums on second homes, not the thresholds for holiday lets, but her proposals would condemn large numbers of legitimate Welsh holiday-let businesses to paying these increased council tax premiums, drive many out of business in consequence and therefore further undermine our rural tourism economy.” The Welsh Government has announced that, from today (28/03/2022) face coverings will no longer be required by law in retail settings and on public transport, though they will continue to be recommended in public health advice. The requirement to self-isolate will also move into guidance while the £500 self-isolation payment to support people will continue to be available until June. While the announcement brings the rules in Wales closer to those in England, one important difference for businesses is that in Wales they will still be required to undertake coronavirus risk assessment with reasonable measures put in place in light of those assessments.
https://gov.wales/cautious-approach-to-coronavirus-protections-to-continue General Economic Status
Key Tourism Related Announcements The big announcement was the reduction in Personal Income Tax - The basic rate for personal tax rate will decrease from 20% to 19% from April 2024 Fuel Duty
National Insurance
R&D Tax Reform
Changing Places Fund Increased
Arms Length Bodies Review Guidance
(this one is of interest because VB is an Arms Length Bodies, however VW in Wales is part of a Government Dept.,) . Suzy Davies, WTA Chair gave evidence to the initial meeting of the UK Covid-19 Inquiry themed around Travel and Tourism. This was an opportunity to help shape the work of the Inquiry by providing feedback on the draft Terms of Reference. The WTA attended the meeting alongside other industry organisations from around the UK. A transcript of our meeting will be published on our website at the end of the consultation period.
The Inquiry website has more information about the Inquiry and the public consultation is now open. Please share the link to the consultation with others: https://ukcovid19inquiry.citizenspace.com/contribute/terms-of-reference-consultation/ If you have any questions, please contact the Covid-19 Inquiry Set Up Team: Email: contact@covid19.public-inquiry.uk Website: https://covid19.public-inquiry.uk The UK Covid-19 Inquiry has held a roundtable meeting (22/03/2022) themed around Travel and Tourism. This was an opportunity for the WTA and its sister organisations from around the UK to shape the work of the Inquiry by providing feedback on the draft Terms of Reference. A full transcript of the meeting will be published on the website at the end of the consultation period. Covid-19 Inquiry Set Up Team.
The inquiry website has more information about and a public consultation is now open. The link to the consultation with others: https://ukcovid19inquiry.citizenspace.com/contribute/terms-of-reference-consultation/ Email: contact@covid19.public-inquiry.uk Website: https://covid19.public-inquiry.uk To help us lobby the Welsh Government to reduce the 182 day threshold we needed as much data as possible.
Thank-you to all those of you who completed this survey. The full body of evidence is now available on our WTA Consultations page which has now been submitted to the Welsh Government. https://www.wta.org.uk/consultation.html The Welsh Government has been warned that some businesses across Wales could be forced to close as an unintended consequence of proposed radical new taxation rules which are planned to be introduced next year. MWT Cymru, which represents more than 600 tourism and hospitality businesses across Powys, Ceredigion and Southern Snowdonia, has surveyed self-catering businesses across Wales to discover how they will be impacted by proposed taxation rules, which are linked to the ownership of second homes. From April next year, Welsh county councils will be given the power to increase council tax on second homes to 300%. In addition, the Welsh Government is making the rules a lot stricter on self-catering accommodation qualifying for business rates rather than council tax. Currently, self-catering properties in Wales must be available to let for a minimum of 140 days in any 12-month period, and actually let for at least 70 days to qualify for business rates rather than council tax. Under the propose new rules, properties must be available to let for at least 252 days and actually let for at least 182 days to qualify for business rates. MWT Cymru received 137 responses to its survey, with 66% of businesses saying they would be unable to meet the new rule of letting their properties for 182 days due to the short tourism season in Wales. Several businesses said they would be forced to consider closing as they could not afford to pay 300% council tax if their local authority decides to impose that rule. Val Hawkins, MWT Cymru’s chief executive, is calling on the Welsh Government to reconsider the radical taxation rules and she wants holiday let businesses to lobby councillors and Members of the Senedd on the issue. She believes the new rules on holiday lets will disproportionately impact businesses in rural Wales, particularly farmers who have diversified into tourism. She fears that all rural businesses, such as shops and pubs, will suffer the knock on effect if holiday let businesses close. She warned that if holiday let properties are sold, they will not necessarily boost the housing stock for local people for a variety of reasons, including being too expensive, having commercial conditions attached or being too large, small or remote. Mrs Hawkins says the severity of the new taxation rules has caught the tourism industry by complete surprise and self-catering accommodation might be the unintended victim of a clamp down on second home ownership in Wales. “From the responses to our survey, we know that many businesses would have to consider closing if the new taxation rules are introduced,” she said. “We hope the Welsh Government has already modelled that into their economic impact assessment. “There is deep concern about the proposed taxation rules from all types of holiday let businesses, from single to multiple let units. We fear that these rules will discourage new entrants from coming into the sector. “They will be unable to register for business rates until they have made their property available for at least 252 days and actually let it for at least 182 days. Then, there’s a possibility they could end up paying triple council tax at the end of the year if they fail to meet the threshold. “These new taxation rules will put pressure on the tourism economy at a time when local communities across Wales are struggling to recover from the impact of the pandemic and the increased cost of living crisis. The last thing we need is a reduction in the contribution that tourism businesses make to these communities. “The holiday let sector is being swept away with the rhetoric of second home ownership without any serious consideration being given to how the new taxation rules are going to impact communities in real terms. “We are urging the Welsh Government to urgently reconsider the threshold for letting holiday accommodation which is completely out of step with other parts of the UK. “It will be at the discretion of individual local authorities across Wales whether or not they impose the proposed new taxation rules. Surely, these local authorities don’t want to reduce tourism in their local economy as an unintended consequence of these rules? “The importance of the tourism sector to the Welsh economy, particularly in rural areas, cannot be overstated in terms of jobs supported and investment.” Response to Letter sent by WTA 8th March regarding the Retail, Hospitality and Leisure Rates Relief scheme.
In 2022-23, the Welsh Government will provide £116m of targeted non-domestic rates support to businesses in the retail, leisure and hospitality sectors. Ratepayers will be eligible for 50% off their liability for the financial year. The amount of relief under the Welsh Government’s Retail, Leisure and Hospitality Rates Relief (RLHRR) scheme will be capped at £110,000 per business across Wales. Our approach means that businesses in Wales will receive comparable support to that provided in other parts of the UK. To ensure businesses in Wales are sufficiently supported, and reflecting the nature of our tax base, we have invested an additional £20 million on top of the consequential funding received from the UK Government. This is in addition to our permanent relief schemes that provide over £240m of relief every year. Full guidance on the scheme is published on Business Wales webpages and as in previous years, the scheme will be administered by local government. The Retail, Leisure and Hospitality Rates Relief scheme for 2022-23 will be application based, designed in a manner such that local authorities are able to ensure the £110,000 cap is accurately enforced across Wales. The scheme guidance and timescales for administration has been developed in conjunction with local authorities. Businesses that have been able to continue trading at a substantial level, such as food retailers, may opt not to apply for the relief despite being eligible. The scheme applies to rates liability from 1 April to 31 March for the relevant tax year. Any queries about eligibility for relief and the application process should be directed to the relevant local authority. The Retail, Leisure and Hospitality Rates Relief scheme for 2022-23 will operate on a similar basis to how it has done in 2020-21 and 2021-22, using discretionary powers under section 47 of the Local Government Finance Act 1988, as such no legislation will be in place governing the specific operation of the scheme. |