In the news over the Christmas.

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Just in case you missed them three items in the news over the festive period: Business rate changes, mandatory landlord licensing and misleading holiday advertising:

Business rates in multi-occupied properties. As first aired in the Autumn Budget the so-called “staircase tax” introduced in England and Wales last year, following a Supreme Court ruling, will now be repealed, subject to the outcome of a consultation launched on 29 December 2017 to 23 February 2018 and subsequent Westminster Parliamentary approval. Although the Act under consideration applies to both England and Wales the proposals are specific to England only.  Any changes in Wales are a matter for the Government there to assess and despite research I am currently unsure as to what the precise position is in Wales.   Hopefully someone will now tell me, so I can tell you.

Last year’s change to how businesses are charged where they occupy various different parts of the same building, that are linked by either corridors or staircases and which are shared with other tenants resulted in many businesses and, in particular smaller ones, paying a combined higher level of rates than under the old and apparently reasonably well understood system of a single rate for any adjoining (wall to wall, ceiling to floor) rooms. Smaller businesses were especially prone to disadvantage due to the loss of “quantum discounts” and the mainly negative, unintended impacts on small business relief calculations. Moreover, the increases were backdated to 2015 in England and 2010 in Wales and this was viewed as particularly harsh given the inability of businesses to have forecast and have made reasonable financial provision for them.

The proposed changes to the Local Government Finance act 1988, if enacted, will essentially aim to try to reinstate the previous system as it was prior to the Supreme Court ruling. Businesses will have the right to appeal against the Valuation Office Agency valuation if they feel that they position has not been correctly reinstated or where they feel that the new separate valuations are more appropriate (more advantageous) to their particular circumstance. It is proposed that the changes to be made will also be applied retrospectively and therefore there should be a number of repayments due. It is all  rather complex but well worth having a basic understanding of when you are dealing with local SMEs on a regular basis. Although nothing is ever certain the feeling is that the proposal will be widely supported and that the 1988 Act will be amended in due course. If you need to know more the consultation documents giving chapter and verse can be accessed at:  https://www.gov.uk/government/consultations/business-rates-in-multi-occupied-properties

This is generally good news for the businesses paying higher rates than they previously did. It is rather less good news the Valuation Office Agency who will have to revalue the recent revaluation and deal with queries and appeals post enactment and it may be particular unwelcome news for Local Councils who are due to issue 2018 bills within the next 3 months and who will be responsible for administering any subsequent revised billing and refunds at some point, presumably post March 2018?  I can’t find any references yet as to where the burden of any implementation costs are likely to fall.

Mandatory property licensing. Following last year’s consultation in England Ministers have also indicated that they will now look to impose mandatory licensing on a class of smaller properties multi-occupied properties previously exempt. Rules that have applied to Houses in Multiple Occupation (HMOs) of 3 or more floors would then apply in England to properties of one or two floors where they are occupied by more than a given number of separate occupants or family groups. In addition, new conditions may be added for existing and new licences, including new minimum floor space requirements for single and shared room occupancy and a definition that will exclude some individuals with certain convictions from being allowed to let properties. The inclusion of “shared housing” in the mandatory licencing regime would mean that the number of licensed properties in England is likely to rise from c 60k to over 170k.

From a tourism prospective it should allow greater control of HMO issues found in former and functioning guesthouse and B&B areas of resort towns and Cities and it is likely to take in many more of the typical student let properties in popular university towns and Cities and of course it will also have a major impact on London Boroughs and potentially on the London rural town and coastal resort commuter belt. These changes, combined with recent increases in local authority powers to levy and retain, for enforcement purposes, significant on the spot fines where persistent breaches are found, are all aimed at stamping out rogue landlords, reducing overcrowded and eliminating the provision of the poorest quality private rented accommodation.

This should be good news for tenants, mixed news for responsible landlords (although few might agree) and broadly good news for Councils that will no longer be forced to apply for selective licensing to tackle a range of housing issues related to smaller shared accommodation and low-rise HMOs. In England there are c 65 authorities that have already felt compelled to accept the associated costs and apply to adopt one or more selective licencing scheme within their areas. In Wales the Government has already adopted a more robust approach to licencing and registration some years ago and there are no proposals to change the current arrangements in Wales.

Holiday promotions. A recent Which? report suggests that a small number of major overseas tour operators and travel companies are making misleading or even false claims about the level of availability of holidays and the true level of price discounts being offered.  Based on a sample of 30 advertisements over a 3-week period in July and August 2017 they found 16 cases where the price was the same or lower after a limited time or availability deal had ended.  Which? claim that in some cases the promotions could be in breach of consumer law.  As a result, some companies have already agreed to review their advertising practices,  whist others have denied any wrong doing.  See more at:  https://www.itv.com/news/2017-12-30/consumers-fooled-by-misleading-holiday-deals-says-travel-watchdog/

In general, the Advertising Standards Authority (UK advertising industry body) do tend to take such reports quite seriously and it is entirely possible that further action may follow against UK-based companies, particularly if the Which? report is then supported by substancial consumer based complaints.  Hopefully the travel companies and others, often primarily advertising online, will take heed of the need to avoid artificially pressuring customers to buy now or lose the deal.   Meanwhile the Competition and Markets Authority (Government body) who may well also have a strong interest in the above issues, continue their investigation into online accommodation booking following complaints from the Bed and Breakfast Association last summer and subsequent CMA consultation which closed on 15 December.  Unlike ASA the CMA can take far more robust action against both UK and non-UK based companies:  https://britishdestinations.net/consultation-responses/open-consultations/online-search-and-booking-websites-consultation-closing-15-dec-17/

 

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