1. Sharing accommodation tax relief. There has been some speculation in the broad sheet financial sections suggesting that government is concerned that the existing rent-a-room tax break is “costing too much”. The concern appears to be that the individual £7.5k tax free concession originally introduced, largely, to increase the availability of low-cost longer-term accommodation, which then also (intentionally?) energise the sharing short-term accommodation sector may have backfired, both in terms of the degree it has or hasn’t grown the longer term let accommodation base (lodging for want of a better description) and in a failure to generating a compensating tax take elsewhere in the short-term sharing accommodation sector (mainly from platforms like Airbnb). Although the sharing accommodation sector has grown dramatically in the last decade, the total tax take on multimillion-pound sales remains surprisingly low.
If they wish to correct this Government has three basic choices: extract more tax from the small number of dominant, internationally based platforms, limit or remove the current individual tax concession, or a bit of both.
Last year there were moves afoot to restrict the tax concession to those who physically shared their own accommodation with their guests, thus denying access to the concession to occasional whole property lets and to the burgeoning regular whole property and multiple whole property businesses. Those proposed legislative changes apparently fell victim of last years political upheavals.
The speculation is that Government, or more particularly Treasury and therefore potentially government in general of whatever colour, are likely to continue to actively consider restricting the concessions. Whether that is something for a new Government’s first budget or a subsequent budget remains to be seen.
Meanwhile, the tourism industry and in our case destination management should take the opportunity that this pause creates, to take a view on whether the tax concession is needed at all? And if it is, to whom and in what circumstances it should it apply? This is potentially a rather more complex question than it may at first appear. If you or the businesses you represent have any strong views on this please share them with me.
2. Other sharing accommodation issues. In the last fortnight there has been a rash of sharing accommodation related articles on issues from Liverpool City Council’s initial moves towards introducing “London style restrictions” on sharing accommodation provision in the City, to the initial finding of the Government’s consultation in Scotland on the introduction of regulatory controls. These new articles have been added to the ever growing library under the “Sharing economy menu & OTA” tab of British Destinations.net or direct to the page at: https://britishdestinations.net/tourism-the-sharing-economy-and-its-wider-implications/
3. Package travel. Easy Jet have announced a relaunch of its package travel business, which has been on the go since 2011. The stated intent is to double its current packages sales. Industry opinion on the rational and the pros and cons of the plans are mixed. Some have suggested that the move in the wake of the demise of Thomas Cook demonstrates that the package holiday is not dead, while other are far less convinced and point to wider issues in low cost flight industry. Given that popular overseas package holidays are competing for the UK domestic holiday pound it is one of a number of major tourism sectors that we all need to watch and try as best we can to understand.
In addition the mixed reaction to parallel announcements on carbon offset are also of potential interest. There is going to be endless battles to be fought in the coming months and years over who is the greenest and cleanest. Easy Jets proposed actions are already being questioned. Are they a genuinely positive move or just “green washing”: