The Government’s announcement on the details of the business energy cap is likely to form the cornerstone of the “mini-budget” that the Chancellor will be announcing on 23rd Sept. It is also speculated that he will announce plans to reverse the recent rise in national insurance, stop the planned rise in Corporation Tax, and maybe even change business and VAT rates and even income tax.
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Response in full :-
Rebecca Evans AS/MS Y Gweinidog Cyllid a Llywodraeth Leol Minister for Finance and Local Government Bae Caerdydd • 07 September 2022 Dear Adrian, Thank you for your letter in relation to the classification of self-catering accommodation for local tax purposes. Your letter covers certain points and questions which I have addressed in my replies to Suzy Davies of 9 June, 28 July and 9 August. In particular, I have set out the Welsh Government’s position in relation to the timing of changes to the letting criteria, their application in assessments by the Valuation Office Agency, exceptions from the council tax premium, and the assessment of potential impacts (including equalities considerations). I have also shared our detailed guidance on the operation of the letting criteria, which has been updated to reflect the implementation of the new letting criteria from 1 April 2023 and to include frequently asked questions. I will, therefore, focus on the additional points raised in your letter in this reply. The letting thresholds apply nationally because they define a key aspect of the system, namely whether a property is treated as a domestic dwelling or a non-domestic holiday let for local tax purposes and, in turn, whether it is liable for council tax or non-domestic rates. Other aspects of the local tax system, such as the powers for individual local authorities to apply reductions, reliefs or premiums, allow the council tax and non-domestic rating systems to be tailored to local circumstances. In relation to the legislative concerns you raise, in preparing the Non-Domestic Rating (Amendment of Definition of Domestic Property) Order 2022 we took account of all the relevant timing considerations, including the pressing need to address the issues presented by the large number of second homes and holiday lets in some communities. We concluded that the announcement and publication of the plans and legislation provided sufficient notice for local authorities, property owners and other stakeholders to prepare for the changes. The legislation was also scrutinised by the Legislation, Justice and Constitution Committee and its report, which is published on the Senedd website alongside the legislation, did not raise any technical scrutiny points. I can confirm that the published document containing the Explanatory Memorandum (Part 1) also contains the Regulatory Impact Assessment (Part 2). My most recent reply to Suzy Davies addressed specific questions about both parts of the document which is available here: EM/RIA. I have listened to the views of your members and colleagues. The steps we are now taking to consider exceptions from council tax premiums and provide updated guidance to local authorities will take account of the views expressed about the types of properties which might be excluded from liability for premiums. As mentioned previously, the guidance will also clarify the other options available to local authorities, including their powers to reduce council tax bills for individual properties or classes of properties which they can tailor to local needs. The legislation and guidance will reflect the approach I have set out previously, and I can assure you that it will be my considered response to the range of views I have heard. I will make a further statement on the progress of this work in due course. Yours sincerely, Rebecca Evans AS/MS Y Gweinidog Cyllid a Llywodraeth Leol Minister for Finance and Local Government WTA Statement - The grief of the nation is palpable and we alongside our partners and communities mourn the death of Queen Elizabeth II. It is with great gratitude that we are thankful for all that she accomplished for Wales in her long service. Particularly with regard to raising the profile of the nation internationally.
Whilst there will be an official period of respectful mourning we will continue with the normal run of business, but may make adjustments where appropriate. Rebecca Evans MS confirms the Welsh Government is considering exceptions from council tax premiums8/9/2022 Rebecca Evans AS/MS Y Gweinidog Cyllid a Llywodraeth Leol Minister for Finance and Local Government
07 September 2022 Thank you for your letter in relation to the classification of self-catering accommodation for local tax purposes. Your letter covers certain points and questions which I have addressed in my replies to Suzy Davies of 9 June, 28 July and 9 August. In particular, I have set out the Welsh Government’s position in relation to the timing of changes to the letting criteria, their application in assessments by the Valuation Office Agency, exceptions from the council tax premium, and the assessment of potential impacts (including equalities considerations). I have also shared our detailed guidance on the operation of the letting criteria, which has been updated to reflect the implementation of the new letting criteria from 1 April 2023 and to include frequently asked questions. I will, therefore, focus on the additional points raised in your letter in this reply. The letting thresholds apply nationally because they define a key aspect of the system, namely whether a property is treated as a domestic dwelling or a non-domestic holiday let for local tax purposes and, in turn, whether it is liable for council tax or non-domestic rates. Other aspects of the local tax system, such as the powers for individual local authorities to apply reductions, reliefs or premiums, In relation to the legislative concerns you raise, in preparing the Non-Domestic Rating (Amendment of Definition of Domestic Property) Order 2022 we took account of all the relevant timing considerations, including the pressing need to address the issues presented by the large number of second homes and holiday lets in some communities. We concluded that the announcement and publication of the plans and legislation provided sufficient notice for local authorities, property owners and other stakeholders to prepare for the changes. The legislation was also scrutinised by the Legislation, Justice and Constitution Committee and its report, which is published on the Senedd website alongside the legislation, did not raise any technical scrutiny points. I can confirm that the published document containing the Explanatory Memorandum (Part 1) also contains the Regulatory Impact Assessment (Part 2). My most recent reply to Suzy Davies addressed specific questions about both parts of the document which is available here: EM/RIA. I have listened to the views of your members and colleagues. The steps we are now taking to consider exceptions from council tax premiums and provide updated guidance to local authorities will take account of the views expressed about the types of properties which might be excluded from liability for premiums. As mentioned previously, the guidance will also clarify the other options available to local authorities, including their powers to reduce council tax bills for individual properties or classes of properties which they can tailor to local needs. The legislation and guidance will reflect the approach I have set out previously, and I can assure you that it will be my considered response to the range of views I have heard. I will make a further statement on the progress of this work in due course. Yours sincerely, Rebecca Evans AS/MS Y Gweinidog Cyllid a Llywodraeth Leol Minister for Finance and Local Government. Yours sincerely, Rebecca Evans AS/MS Y Gweinidog Cyllid a Llywodraeth Leol Minister for Finance and Local Government It was the practice of the Valuation Office Agency (VOA) to treat contiguous units of property as a single hereditament, when occupied by the same person. The VOA approach to the meaning of contiguous was to treat two units of property as such, where they were separated only by a wall or floor/ceiling. For example, a wall or floor/ceiling between two otherwise contiguous offices may contain services in a void, used by the landlord, but such spaces were not considered to prevent the units of property being contiguous. The general rule currently being operated in Wales is that two contiguous properties in the same occupation are only assessed as one if they can be considered a self-contained unit of property. Typically, this will apply if both parts are physically accessible from each other without having to go onto other property or through commons parts (such as a common corridor or stairwell).
The consultation seeks views on the draft Non-Domestic Rating (Property in Common Occupation) (Wales) Regulations 2022, referred to in this consultation as ‘the draft Regulations’. The draft Regulations set out the circumstances in which two or more hereditaments should be treated as one for valuation purposes in the determination of an owner or occupier’s NDR liability. The consultation is technical in nature and seeks views on the clarity of the legislation in achieving that objective. For further information the full consultation can be found on https://gov.wales/consultation-draft-non-domestic-rating-property-common-occupation-wales-regulations-2022-html Michelle Donelan MP is the MP for Chippenham, having been first elected in 2015 and was previously Higher and Further Education Minister. A committed Conservative from a very young age, she has worked in the private sector in the magazine and entertainment industry including, working for World Wrestling Entertainment. She voted for the referendum to leave the EU and has a particular interest in the delivery of education, skills and opportunities.
The other appointments are:
With Water Authorities introducing bans on water use, the details of what water use activities are banned can differ from area to area so it is important to know what is and is not allowed in your specific area.
The law on hosepipe bans is contained in the Flood and Water Management Act 2010. Section 36 of this Act allows Water Authorities to ban the use of hosepipes and introduce other restrictions on the use of water if there is, or it is predicted that there will be, a serious shortage of water for distribution across a certain area. Section 49(3)(i) of the 2010 Act provides that Section 32 and Schedule 3 come into force in relation to Wales in accordance with provisions made by order of the Welsh Ministers. There is no definition or what constitutes “a serious shortage” so it is up the local Water Authority to make that determination – although they would have to justify their decision if there was a legal challenge. It is important to note that Water Authorities do not have the power under this Act to impose bans on businesses. The power to do this rests with Central Government who can ban the use of water for any non-domestic purpose as they see fit. So, at the moment, there are no bans on any form of water use for businesses. However, that said, business should, as closely as possible, try to mirror the rules on domestic water use in order to play their part in conserving water and not drawing criticism for, for example, watering their lawns when neighbours are banned from doing so. The gap between tax revenue and public spending in Wales is currently running at around £13.7bn, which is 19.4% of GDP, compared with a deficit of 2% of GDP for the UK as a whole. Our economy needs supportive measures now. In terms of timing - post pandemic, staffing, global energy costs, cost of living crisis, we need time to recover, not face further burdens from the Welsh Government and Plaid in relation to increasing taxation and unknown regulation on top of UK tax and regulation. Wales, along with the rest of the UK, is the second most highly taxed tourism industry in the world, and while most of the levers are not in the hands of Welsh Government, we ask that Welsh Government does not make the situation worse; in terms of fairness and competitiveness.
Instead, the current slew of proposals and the resulting taxation and regulation pushes more burden onto the same beleaguered businesses and individuals who are now becoming focused on retracting investment. Our industry’s foundation is built on self-employment and seasonal jobs. The current proposals are threatening the very survival of many of those who bear the weight of the industry. For many hard-working families a small tourism business is the third vital source of income that makes rural living in Wales viable alongside part time often low paid work. There is a real danger from what appear to be un-modelled Plaid policies coupled to tick box consultations that lack weighting and engagement whilst ‘being told’, rather than ‘being listened’ too. Without thorough economic impact assessment on each Plaid proposed change to legislature, we are likely to see substantive negative economic impact via de-investment; the closure of micro businesses and the loss of self and part time employment across Wales. The WTA has been looking forward to building an increasingly mature and engaged relationship with Welsh Government post Covid. Our locally-embedded small business membership is ideally placed to collaborate on a community-up, regenerative tourism industry which can be proud of the highest quality and warmest welcome at all price points. Instead, our energy and resources are being sucked up by endless consultations rather than helping businesses find their way through these difficult times. The hard-line policy positions arising from the Co-operation Agreement have created distrust of Welsh Government, completely undermining the more positive relationships built during the Covid Pandemic. This is not where we want to be in our own relationship. While the WTA does not receive government support to be a critical friend, unlike our sister Alliances in Scotland and England, we absolutely believe a critical friend is what Welsh Government needs in this space. It is our role to convey sentiment, informed opinion and evidence of members from all sectors of the industry and all corners of Wales: We request that the Welsh Government:
We are not looking for handouts, but we are looking for the ability to create those experiential holidays for our visitors. Welcoming destinations with an open offer to come and enjoy Wales responsibly. We believe these measures could even threaten the very survival of our true icon – the unique Welsh welcome that underpins all tourism promotion produced over the last 26 years and more. The concern now is that we will start to lose those that make Wales a special place to visit, not just from hospitality and accommodation, already increasingly controlled by on-line travel agencies, but also community players. This will only leave global companies with bland homogeneity, a lack of community engagement and prohibitive UK and Wales tax arrangements. So come on Welsh Government, let us do our jobs, we expect better. The Supreme Court has published its judgement on Harpur Trust v Brazel, which has significant implications for the hospitality and tourism industry. At a very basic level, this judgement is on how businesses should calculate holiday pay entitlements for part time, part year and zero hours contract staff. Some businesses currently calculate holiday pay on what is generally called a pro-rata basis whereby, any whole week in which no pay was received is included holiday reference period for the calculation of Holiday Pay. Rather, the Supreme Court has rules that businesses should use the Calendar Week Method in which weeks in which when the employee was not working are excluded from this calculation.
UKHospitality is working with its lawyers to develop a FAQ on how businesses should apply this ruling and have kindly offered to share this with Tourism Alliance members so I will send this out when it is produced. https://www.supremecourt.uk/cases/docs/uksc-2019-0209-judgment.pdf BEIS has produced an updated version of the PTR guidance for businesses. The new version does not change their interpretation of the legislation but it does contain more case studies on what they believe constitutes a package and what does not. However, in doing this, the revised guidance simply highlights some of the absurdities of the PTRs.
For example:
However, there does appear to be a change in regard to Linked Travel Arrangements with the inclusion of a new Case Study:
This is an improvement on BEIS’s previous position which was that the accommodation provider had to provide a comprehensive list of local restaurants, attractions, etc and that providing recommended places constituted forming a Linked Travel Arrangement. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1093536/package-travel-regulations-2018-guidance.pdf |