Month: January 2019

MHCLG Consultation Business rate treatment of self-catering accommodation

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MHCLG (Ministry of Housing Communities & Local Government) have consulted on proposed changes to the regulation governing the treatment of self-catering accommodation in England for business rate purposes.  They are proposing to amend the rules to close a potential loophole that allegedly allows some second home owners to erroneously claim business status and small business rate relief and, thus, avoid paying both council tax and any business rates if the property is rated at £12 k or less.  Essentially the proposal is that the property must be available for at least 140 days and let for at least 70. This is in line with similar regulation for other accommodation types in England and for self-catering and other accommodation in the other home nations.

Our understanding is that the relief is funded by Central Government in the first instance.  Because of the complexities of business rates and funding formulas we are not totally clear on the actual impact on Local Authority funding in every case, either as it is now, or what it might be if and when 100% local retention (and carrying the cost of relief?) becomes the norm.  Regardless it is of major concern, given the pressure on public finance and the resulting pressure on discretionary services, include those that support the visitor economy.

Having sought and received comments, I have contributed to the Tourism Alliance’s response. Given the wide scope of its membership interests, the Alliance has not unreasonably taken a very moderate, middle of the road position, largely supporting the proposals as presented.  On balance I think British Destination members would largely support the stance and I might normally have left it at that.  However, on this occasion I have taken the opportunity to write separately supporting the Tourism Alliances response but also highlighting some of the more extreme opinion.

I have done so because at the heart of this is a serious and seemingly well-founded allegation that scares public resource is being used by some to effectively subsidise the cost of second or holiday home ownership under the guise of small business support.  Left unchecked that is potentially political dynamite, it’s a potential PR and public policy nightmare for the “tourism industry” if it/we are seen to have condoned or unwittingly  supported it and above all, the likely future backlash could do some serious collateral damage to the interests of genuine self-catering accommodation businesses and quite possibly others currently legitimately in receipt of small business relief.

For these reasons it is important that MHCLG don’t just try to resolve the issue on first attempt but actually succeed.  I am not an expert in the field of business rates but I can see a number of possible flaws in the plan and have therefore asked a few simple questions in the hope that MHCLG might be encouraged to think more deeply about these and try to strengthen the approach where there proves to be merit in the concerns raised.  I hope that the majority of the membership would support the rational, if not necessarily the detail or the style I have used:

business rates self-catering british destinations reply

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New edition of VB Foresight published

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I have added a copy of VisitBritain’s latest edition of Foresight to our VB Foresight library.  Edition 164 looks at the regional spread of inbound tourism to the Nations and Regions of the UK in 2017.

It contains  relatively high level data with  a smattering of references to destinations (the top 5 in each Home Nation/ English region), there are also links to data on day trips to destinations by overseas visitors (page 44) which takes in a much larger number of destinations, including many in membership of British Destinations (this report was  previously added in 2018 to our main research & statistics library).  The entire Foresight report is at the very least worth scanning, if only to help contrast and compare the recent historic spread of both visits and value of international tourism across the UK.  Research practitioners or destination mangers with a more detailed interest in statistic may wish to examine the report and its source data more closely.

The report is the same/much the same as that originally published online by VB in August 2018, using the then provisional ONS figures for 2017. These will by now have been confirmed, hence I assume the formal publication as yet another of VB’s excellent and informative Foresight series.

All the last 40 or so Foresight are available in one place within the * VisitBritain section of our members’ protected area: https://britishdestinations.net/members-area/content/visitbritain-november-2013-latest-edition-of-forsight-and-vb-trend-updates/  (paragraph 3)

or you can go direct to the edition 164 at:

https://britishdestinations.files.wordpress.com/2019/01/foresight-issue-164-january-2019.pdf

In the News

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The gig economy.  A Sunday Times investigation alleges that the contractual right to substitute is being abused by Diliveroo and UBER Eats riders and drivers.  In essence it is said that drivers and riders are subletting jobs or their accounts in their entirety to individuals who are not undertaking the work, legally/safely/within tax/insurance/health or other regulation.  Typically, of the gig and sharing economy business models both Deliveroo and UBER Eats’ contracts make the approved individual driver/riders entirely responsible for ensuring that their own substitution is conducted within the law and all appropriate regulation is applied, rather than themselves. How that can be realistically achieved by the average worker and how it can possibly be policed currently is highly questionable.

Why is this important?  Firstly, if it is true, even in part, it is further evidence that both the gig and sharing economy self-regulated model is seriously flawed and will inevitably be abused, unless and until appropriately regulated. To be effective the necessary additional controls should logically be focused towards the relatively small number of, multinational, platforms providers, rather than towards the multitude of individual workers/contractors that use their platforms.  This after all is the general principle applied to labour provision in other more traditional industries within the UK.

Secondly, the contractual right to substitute was recently cited in an employment case as the only remaining reason that drivers and rider were classified as self-employed/contractors and, thus, not employees with associated employment rights.  Proven abuse, particularly involving high profile issue like immigration status, the right to work, unsafe practice or avoidance of income taxes and national insurance could encourage Government to act.  If that action removed the right to substitute or made the platform responsible for it, then the whole issue of employment status and critically employment rights would be opened up again in the delivery sector and, by implication, in other areas of gig economy activity.

See articles article 7 Jan 19 and 6 Aug 18 on our gig economy page for more information: https://britishdestinations.net/tourism-the-sharing-economy-and-its-wider-implications/gig-economy/

Membership invoices

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The majority of the membership pay their annual subscriptions either in the closing quarter of the financial year  for the next financial year i.e. now until the end of March or at the beginning of the financial year  i.e. in April/May. A very small number pay at other times across the year and they will be aware of this.

I have just individually emailed all those who normally pay between January – March asking for order numbers.  If you are in this category and have not heard from me then please let me know.

If you normally receive your invoice in April but would on this occasion like to pay before 31 March then please let me know, so I can make the necessary arrangements.

Your continued support for our work at the National level is very much appreciated.