Month: January 2019
Colleagues in the Professional Association of Self-Caterers (PASC UK) have persuaded the Valuation Office to agree a major reduction in self-catering business rate valuations in both England and Wales. The ability to seek a revaluation came in to force yesterday and any reduction subsequently granted will be backdated to April 2017 when the current rates were set. There is therefore both a potential future reduction in valuation and rates paid and a refund on past over-payments on offer.
The reduction on average will be 33.3% of the current rate but in reality, it will vary depending on how accurate the original 2017 valuation was. Where this reduction pushes the rateable value below £15k, businesses will be able to apply for tapered relief and below £12k for the 100% small business relief, meaning further saving for some and for others, no charges at all.
The revaluation and associated reduction are not automatic. Businesses must apply and submit what might appear at first to be a complicated revaluation form. Doubtless, a small army of claims handlers will soon appear on the scene offering to submit the revaluation for a hearty cut of the future savings and any rebate.
Alternatively, businesses can speak to colleague in PASC UK who are producing a useful Q&A on how to complete and submit the form directly and at no cost, other than form filling. Not unreasonable, in return PASC UK simply wish to have the opportunity to demonstrate their expertise and promote membership among professional self-caterers (full-time businesses, who generally do not let their properties or market them via agents). There is no obligation to join PASC UK and businesses are of course free to contact the valuation office direct, or engage agents to submit claims at an agreed cost or an agreed cut of the savings made.
Please consider circulating the PASC UK briefing note to your self-catering businesses:
Clearly there will be implications for business rate income in England and Wales. The downstream implications of these for local authority area funding are as yet unknown to us.
You will be aware that since 13 January 2018 it has not been permissible to charge a different price for goods or services based on the method of payment, specifically you can no longer legally charge a credit card fee or conversely do much the same thing by offering discounts for say cash payments that would in effect make the credit card payments higher than the alternative. The only exceptions are payment by business credit or business debit cards, where separate charges to recoup the actual cost of a B2B credit card transaction remain legal.
Unhelpfully it is still permissible to levy a surcharge for cash, cheque and bank transfers payments like direct debit, provided that the surcharge doesn’t exceed the actual processing cost you are attempting to recoup. Typically, these type of surcharge payments are applied in areas like the payment of utility bills or in phone contracts and seldom on the routine sale of general goods and services. More helpfully the new law still allows for the previous common practice of charging a booking, administrative, delivery or similar fees, provided now that the cost is the same to all customers, regardless of the means of payment. The level of fee isn’t specified. Understandably perhaps some businesses may be confusing the credit card regulation and the separate surcharge regulation and getting it wrong on credit card payments.
We reminded you about the credit card fee regulations last December, principally to ensure your plans and advance promotion for major events and other charged for destination based activities in 2019 – 20 reflected the new law and so that you could also remind key local partners and local businesses, should you feel it necessary. My instinct is that those of you who mount your own events or facilitate others to do so may well get involved in ticketing or similar transactions, traditionally an area that has attracted a differential fees and payment structure.
What has changed since December? Nothing much, other than various consumer groups are rightly continuing to make the public aware of the issues and at least one television-based consumer investigation screened last weekend, ended by urging consumers who have been charged differential rates, regardless of amount involved, to seek to claim these back. It is that call, which in the way of these things may well be picked up by other consumer groups, that has prompted this update.
Facing a future trading standards investigation and possible legal action is something that we would all wish to avoid. Facing the administrative nightmare of a potential unexpected wave of retrospective reclaims, for previous unintended errors (back to Jan 18), however, small the individual sums or the total amount involved might be, doesn’t, in my view, bear thinking about.
I am far from certain about the detailed legal basis for claiming a refund, it will vary depending on precise circumstance in each case. What is clear is that a proven illegal charge can be reclaimed and should be paid. What the moral position might be, or the nature and scale of the reputational damage done, regardless of how you react to any such requests is a different matter. On balance I doubt anything much will come of this and I have absolutely no desire to set hares running or to accidentally encourage the very thing I am trying to help you avoid. I raise it now on the basis that for any DMO that might be vulnerable to such claims, forewarned is forearmed.
If you have not already done so it may be worth checking that going forward your key partners are up to speed on this, if only to avoid finding at some later date that you have been inadvertently helping to publicly promote and/or support an illegal practice. Again, very much more of an issue of protecting the destination’s reputational capital than any concern for material cost.
The House of Commons Tourism statistics and policy briefing note, potentially the first port of call for Westminster based politicians and their staff wishing to know more about tourism in the UK, has recently been updated. It is designed as an impartial, factual briefing documents covering the key points on UK and home nation tourism.
Colleagues in some other sectors have privately questioned the presentation of certain “facts” and/or the interpretations of them. I was very relaxed about this and the content as a whole, until I read what may be seen by other parts of the industry to be a similarly innocuous one-liner on destination management on page 24 under the Discover England Fund section.
In discussing the Discover England fund this section mentions “Destination Management Organisations (DMOs)”, indicates that there are, “….200+ such organisations in England and they come in a variety of shapes and sizes” and then states that: “DMOs rarely have a significant role in the management of their destination, but rather provide information to potential visitors and market the destination”.
That may be the case in some instance, particularly for a small number of the County/larger area-based destination marketing organisations but it certainly isn’t the case for the majority both managing and marketing smaller rural destination areas, historic and other destination towns, coastal resorts and small, medium and large City destinations in England, or for those doing much the same in the other home nations.
The consequence of this misunderstanding and the apparently, coincidental path of some current Westminster Government policies may well be pushing matters rapidly in that direction; a direction where destination management is no longer the business of local public, private or public private sector tourism partnerships and is therefore left largely to fall between the cracks. If it isn’t the Destination Management Organisations business then who’s is it?
There are limited opportunities to comment on the content of the briefing note, these will be explored and the most influential route taken. Meanwhile the publication severs as a timely reminder, if one is needed, of the pressing need to repeatedly reminding Westminster based politicians and officials of the importance of destination management as a core local competence of most local DMOs.
Destinations that ceases to be adequately managed, will in time cease to be destinations that are worth visiting or revisiting and a cycle of decline will soon begin to set in. The fact that this decline is seldom or ever instantaneous allows for short-sighted, short-term cost savings to be made with relative impunity. Those professionals who manage destinations know only too well that serious damage can take as little as a couple of years to start to take hold and that thereafter it accelerates and expands rapidly. Moreover, reversing declining is almost always far more difficult, far more long-lived and costlier than avoiding it in the first place.
Many traditional destinations have had first-hand experience of what happens when you fail to manage the destination to meet changing circumstance and simply carry on marketing them and their main constituent public and private products. It has taken two- and a-bit decades of investment and hard work to successfully reverse several decades of deep decline before that which were sparked initially by the advent of the inexpensive overseas package holiday in the mid-70s. In the current changing circumstance let’s not be forced or cajoled into make much the same mistakes again, especial now that tourism is no longer the preserve of relatively few large, established resorts and rural tourist areas but ubiquitous and an important social and economic driver in a much wider range of communities.
If you get the opportunity to challenge the assertion that DMOs rarely have a role in managing their destination, for example with your local MPs, then please do so.
The original briefing note has been added to the National level political policies and strategies main tab on wwwbritishdestinations.net or go direct to the page at:
A Times article published today suggesting that a letter from Mel Stride MP financial secretary to the Treasury written to Nicky Morgan MP, chair of the Treasury Select Committee has effectively rules out the introduction of an online sales tax; a tax most notably called for by Mike Ashley and a number of other leading retailers in their oral evidence to the Housing, Communities and Local Government Select Committee high streets and town centres 2030 inquiry in early December. Treasury “sources” are quoted as saying that they have not ruled anything out yet. The tone and content of the article is persuasive but not absolutely conclusive.
Mr Stride’s letter is said by the Times to say there is “high risk” that any such tax would breach the (EU) bloc’s state-aid rules. The article points out that while we are due to leave the EU at the end of March, under the draft withdrawal agreement Britain has accepted “dynamic alignment” with Brussels on state-aid rules.
The inference is that EU state-aid regulation could/would still apply post 29 March, during any subsequent period of negotiations on the detail of the withdraw and depending on outcome of those negotiation probably well beyond that. This of course assumes that we don’t simply leave without a deal.
Given a further period of Brexit negotiations the financial secretary’s statement does appear to makes it unlikely that any new sales tax will be seriously considered, let alone introduced, at least in shorter term. Some analysts meanwhile are suggesting that without some radical actions, like an online sales tax, time is already fast running out for traditional high street retailers. Continued lobbying efforts to level the total cost base between online and traditional retail, whether that is via sale taxes, revision of business rates, realignment of high street rents or by a mix of these and other means, need our support in order to help ensure we retain a key element within the attraction of many of our more urban, resort, town and City destinations.
The latest edition 165 of VB’s Foresight and the inbound quarterly trends update have been added to the VisitBritain section of our protected Members’ area.
Edition 165 looks at inbound visitor’s activities in Britain’s nations and regions. It is relatively high level detail but nonetheless destination managers may wish to read the content, introduction and key findings pages 2, 3 and 5 and then scan their own nation or regions data, which is best accessed via the hyper link on the content page.
The inbound quarterly trend update contains a great deal of higher level detail, see page 13 contains the regions and nations breakdowns.
Find the quarterly updated and Foresight 165 in paragraph 2 and 3 of the following Britishdestination.net page:
Forgotten the protected page login? Member representative please just email me asking for the detail.
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:
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: