The Welsh Government are seeking views on:
The Wales Tourism Alliance will be responding formally.
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Embargo: Thursday, June 30, 2022 Three trade associations representing professional self-catering businesses in Wales are to meet a Welsh Government Minister to try to thrash out a solution to what they describe as “punitive” tax changes due to be introduced next April. Wales Tourism Alliance, The Professional Association of Self Caterers UK and UK Hospitality Cymru have warned that the tax changes could force as many as 30% of self-catering businesses to close or sell up. They hope to meet Rebecca Evans, Minister for Finance and Local Government, early next month. Their mission is to “protect real Welsh self-catering businesses” as the Welsh Government proposes stricter rules on 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 as a second home, instead of business rates. Welsh county councils will have the power to increase council tax on all these businesses by up to 300%. The Welsh Government has opted to press on with the tax plans despite receiving evidence of damaging impacts from the three trade associations who surveyed more than 1,500 self-catering businesses across Wales. In a joint letter to the Welsh Government, the associations say they are “hugely disappointed” that their evidence had been ignored. “This all-Wales, one size fits all approach takes no account of the different kinds of businesses that operate in a seasonal Welsh tourism year,” they say. “Nor does it respond to the fact that the problem this proposes to solve does not affect the whole of Wales, something the Welsh Government has, itself, recognised. “Our data shows that more than 30% of professional, local self-catering businesses will face having to sell or close because of this legislation. These are not second home owners. “We are now asking the Welsh Government to formally sit down with us to review and agree what the essential and justifiable exemptions and mitigations might be, in order to ensure that real businesses are not caught in the consequences of this new threshold.” The associations are asking for a transition period of two or three years to introduce the changes, up to 18 exemptions and dispensations for businesses carrying out repairs and refurbishment, property improvements or being forced to close due to ill-health or caring responsibilities. They also want self-catering businesses to have an appeal process against the 182-day threshold in exceptional circumstances. They raise important questions about how councils plan to tax properties that it currently doesn’t know about, such as those relying solely on online listings with global companies. Other queries surround how letting days will be calculated, what is the commercial rate for letting a property, Council Tax rating on businesses with multiple units and taxing pop-up businesses. ends Notes for Editors: The exemptions the three associations are calling for are: 1/ Properties that are limited by planning permission to only be short term commercial lets. 2/ Properties that lie within the curtilage of an owner’s primary residence. 3/ Owners who have multiple units on one site, (e.g., a holiday cottage complex) can average occupancy across the units. 4/ Farm diversification businesses. 5/ Where the units are not housing stock withdrawn from the market but can be proved through recorded planning and building control that they have been created from vacant commercial or agricultural buildings. 6/ Exemptions for cottage businesses that are in effect "small resorts" or complexes. Sites that have multiple units on site owned by the same person, where facilities are provided for and shared by those staying on site. For example, if have pools and games rooms, gyms, a play area, coffee shops. The practicalities (or even the ability) to actually split a business where some cottages would meet the new 182-day criteria and others wouldn't, would be basically impossible. 7/ Where the property is run by a charity. 8/ Weeks given by owners to raise money for charities should count towards days let, max two weeks per year (Either for Charitable status or Not for Profit). 9/ Where the accommodation is a supplementary part of a bigger business, events, weddings etc. 10/ If your short-let business is VAT rated 11/ Formal review of 182 days if Wales officially goes into recession. 12/ Pandemics or forced local closure 13/ Period of grace for new business entrants who would not get to 182 days in the first crucial years The Wales Tourism Alliance (WTA) represents around 7,000 businesses in all sectors of tourism industry across Wales. www.wta.org.uk . UK Hospitality Cymru’s members employ around 140,000 people directly in the hospitality industry in Wales and a further 40,000 supply chain employees indirectly. www.ukhospitality.org.uk The Professional Association of Self Caterers UK is the largest association representing the professional self-catering sector in England and Wales. It has more than 1,300 members and represents more than 50,000 letting properties. www.pascuk.co.uk For more information, please contact: Wales Tourism Alliance Chair: Suzy Davies Tel: 07540 964678 Email: suzy@wta.org.uk The Professional Association of Self Caterers UK Chair: Alistair Handyside, MBE, Tel: 07771 678028 Email: chair@pascuk.co.uk UK Hospitality Cymru Executive Director for Wales: David Chapman Tel: 07753 752084 Email: dchapman@ukhospitality.org.uk Vaughan Gething, Minister for Economy, 7 July 2022:
'As we approach the main summer holiday period, and in the context of requests for additional marketing support at this time from many of our industry stakeholders, I’m pleased to be updating Members on activity currently being delivered by Visit Wales. Implementation, under the Cymru Wales brand, will build on the work already in place, to further assist businesses in their post pandemic recovery. From a fresh marketing campaign, “Croeso,” to tools that will help operators enhance their own promotion and skills, the range of work has been put in place to support the tourism and hospitality sectors that play such significant roles within the wider Welsh economy. This month, the Croeso campaign, using the Cymru Wales brand and its focus on landscape, culture and adventure, is showing those currently considering a break the diversity of experiences on offer in Wales this summer. Welsh Government wants to see a thriving industry and a strong recovery from the pandemic across these sectors that together represent more than a tenth of the Welsh workforce. We are fully aware that there are both short-term and long-term challenges facing businesses, such as the cost-of-living crisis, energy costs and skills and recruitment gaps and this work has been planned to help keep Wales visible as a potential holiday destination for this year and beyond, stimulating consumer interest and encouraging booking enquiries'. Read the written statement in full on: Written Statement: Croeso activity to support the tourism and hospitality industry (7 July 2022) | GOV.WALES. There will be a full Consultation during the forthcoming academic year. Jeremy Miles, MS Minister for Education and Welsh Language has 'set the scene'!
Difficult to tell what the impact might be of any such changes or to know the potential scope of the Consultation until it is published. However, two points for earliest consideration.
Whilst we should never say that anything should not be reviewed and there may well be better ways to adjust terms and holidays, but at a time of such huge Government led change for the self-catering sector in Wales, this just adds to the uncertainty and makes long term planning really difficult. We will shortly have a CPG meeting and Senedd challenge (6th July 2022) plus the first proper meeting on mitigating the impact of the 182-day measure on the 13th of July. The key asks, questions requests for exemptions and dispensations. We will be attending the CPG and colleagues colleagues will be in the Senedd gallery when the challenge by Sam Rowlands takes place. (3-4pm, the 6th of July).
The new Petition to ask the Welsh Government to agree to sit down with us and discuss exemptions and dispensations is now live. We are well past the threshold to have this discussed by the Petitions Committee, (we needed 250 over 1250 on the 6th July) but would encourage any of you that have not signed it to do so asap. https://petitions.senedd.wales/petitions/245202?fbclid=IwAR0_NYeDCWiZO73iMUGizmA4U5kKN7t4pjc00NxmCuicaBoKUyPkC7yYrfg A joint press release has also been sent (WTA, PASC & UKH) explaining that we are asking for the Welsh Government to sit down with us and agree exemptions and dispensations. We have been open with what our asks are in order to dispel the normal comments that such coverage generates about second homes. Recent coverage here: https://www.dailypost.co.uk/news/north-wales-news/dangers-second-homes-purge-1400-24378691?fbclid=IwAR1khybXq73hFNqKGCAdkeTXLinF4zPWfAtug6k7ditWITI5AP0zrV4uU8s https://www.dailypost.co.uk/news/north-wales-news/welsh-tourism-groups-want-13-24363645 https://www.shropshirestar.com/news/local-hubs/mid-wales/2022/06/30/self-catering-bodies-to-meet-welsh-minister-over-punitive-tax-changes/ https://www.shropshirestar.com/news/local-hubs/mid-wales/2022/06/30/self-catering-holidays-in-welsh-could-be-hit-by-tax-changes/ Radical announcements made by the Welsh Government that will affect the Self Catering sector.6/7/2022 The 4th of July saw significant and far-reaching announcements made by the Welsh Government on interventions into the self-catering sector in Wales. The WTA and it's partners have been left stunned by these announcements which follow the 182 day amendment.
In summary, the co-operation agreement between Labour and Plaid Cymru is planning to bring forwards the following measures:
There is not much more detail than the above currently and this inevitably leaves us with a large number of unanswered questions alongside the retrospective aspect. This is currently just an announcement of intention - so not a formal consultation, athough it is based on the previous consultation in relation to Second homes and FHLs. We will all try to find out more and report back as soon as possible. Our thoughts and support are with all Members and owners in Wales who are naturally going to be deeply concerned. Tourism leader challenges Welsh Government’s radical second homes rules The Welsh Government has been accused of disregarding the experience, expertise and livelihoods in the tourism industry with its radical programme, announced today, to address second homes issue in Wales. Suzy Davies, Wales Tourism Alliance chair, has challenged the Welsh Government to face up the unintended consequences of its policy changes and says the contribution genuine tourism businesses make to the viability of communities is being ignored. A recent change to the occupancy threshold needed for a holiday let to be treated as a business dismissed the majority view in the government’s own consultation as well as compelling evidence of harm to the professional furnished holiday let sector. Her comments follow today’s announcement of new planning laws, a statutory licensing scheme and proposals to change land transaction tax in a package of measures to address second homes in Wales. Mrs Davies said that, on the face of it, proposals reflecting a determination to distinguish between genuine businesses and second homes might be welcome, as would a form of registration which guaranteed quality. However, the recent experience over the 182-day occupancy threshold has left businesses disillusioned about the weight Welsh Government gives to their evidence. There is no confidence that proposals will protect their status from being recognised. In the absence of detail, it is not clear where the distinctions will be drawn and whether any rules will be applied retrospectively. Further, there is no confidence that money raised through a licensing system would be used to enforce standards. First Minister Mark Drakeford and leader of Plaid Cymru Adam Price set out the next steps in a programme of actions to help create thriving communities and to support people to afford a home. The co-operation agreement between the Welsh Government and Plaid Cymru includes a commitment to tackle the issue of second homes affecting many communities in Wales. The package of measures includes: • Changes to planning regulations by the end of the summer, including three new planning use classes – a primary home, a second home and short-term holiday accommodation. Local planning authorities may require planning permission for change of use from one class to another and will also be able to control the number of second homes and holiday lets in any community. • Plans to introduce a statutory licensing scheme for all visitor accommodation, including short-term holiday lets, making it a requirement to obtain a license. The Welsh Government says this will help raise standards across the tourism industry. • Local authorities will develop a national framework which will allow them to raise land transaction tax rates for second homes and holiday lets in their local area. The Welsh Government has already given councils discretionary power to increase council tax premiums on second and empty homes and changed the rules on holiday lets taxation. First Minister Mark Drakeford said: “Tourism is vital to our economy but having too many holiday properties and second homes, which are empty for much of the year, does not make for healthy local communities and prices people out of the local housing market. “There is no single, simple solution to these issues. Any action we take must be fair. We do not want to create any unintended consequences, which could destabilise the wider housing market or make it harder for people to rent or buy.” Mrs Davies was not impressed by the announcement: “Welsh Government needs to mean what it says about unintended consequences and recognise that genuine tourism businesses contribute to the viability of communities,” she said. “Whatever their aims, their unwillingness to address the unintended consequences of the policies they have already introduced hasn't convinced the industry of their sincerity on this. “Holiday let businesses are professionally run, often locally owned, employ local people, provide custom for local businesses and pay business premium for things like rubbish collection. “However, across the whole of Wales, they have already been caught up as part of Welsh Government’s policy to control the separate, different issue of second home proliferation in some specific communities. “Tourism providers recognise the worry about second homes but have grave reservations about how Welsh Government intends to resolve it. We are already nervous about the reference to a licensing scheme rather than a registration scheme; this has brought nothing but bureaucratic grief in Scotland. “The Welsh tourism industry is as keen as Welsh Government and Plaid Cymru to see a prosperous, balanced visitor economy where tourism businesses are valued participants in their communities. Yet every announcement comes as a blow to the industry's confidence as its experience, expertise and livelihoods are disregarded.” These latest figures make very disappointing reading for Wales.
The travel and tourism statistics published by The Office for National Statistics (ONS) are based on the results of the International Passenger Survey (IPS), but the running of the survey has been impacted because of the coronavirus (COVID-19) pandemic. During 2021, the IPS survey restarted at the majority of ports but did not operate at Dover until Q3 and there were no interviews on the Eurotunnel through the entirety of 2021 due to COVID-19 restrictions. Therefore, the data for all passengers below does not represent the total inbound market for 2021 and is not directly comparable with historical UK total data. There were 6.2 million inbound visits to the UK in 2021 with a gradual increase throughout the year as travel restrictions to the UK loosened and international travel resumed; 32% of visits were in Q3 and 59% were in Q4. Visitors spent £5.8bn in 2021 with Q4 generating the most spend at £3.0bn. In total, 99.3 million nights were spent in the UK in 2021. The average spend per visit in 2021 was £934, but this excluded any spend by those departing the UK by the Eurotunnel and those departing by Dover (for the first half of 2021). The stats below demonstrate how small the Wales market is in comparison to London & the rest England combined London 2,585,000 visits £2.6 billion spend/Rest of England 3,131,000 visits £2.5 billion spend or even to Scotland at 536,000 visits £521 million spend. Wales had 116,000 visits with £60 million spend. Scotland had an average spend per head of £972 with Wales again lagging well behind with an average spend of around £517. Following on from the evidence that you provided to inform the inquiry into second homes, the Local Government and Housing Committee has published its report today. https://senedd.wales/media/pvgfo4of/cr-ld15139-e.pdf
The Welsh Government, Home Office and the National Fire Chiefs Council have been reviewing fire safety guidance following recent legislative changes to the Regulatory Reform (Fire Safety) Order 2005 (the ‘Fire Safety Order’), and the ‘Do You Have Paying Guests’ guide is one of those that has been amended.
As a short guide to compliance with fire safety law for people providing paying guest accommodation in small premises, they want to engage some of the current ‘responsible persons’ for such premises, for the purposes of the Fire Safety Order, to test the new guide to ensure it is easy to understand and apply before being adopted. The guide should assist them in considering the adequacy of fire safety standards in their type of accommodation. They would welcome anyone to whom the guide would apply to test the guide, with any type of property (including static caravans). They are particularly interested in the opinions of small-scale operators to ensure that the guidance does not place undue burdens on them. They would be content with a small group of testers – maybe 10 or so, who could provide in depth feedback if possible. If you can assist please contact the following email address with contact details and nature of your accommodation. Fire@Gov.Wales |