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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.

 

Recent poor press for outbound UK tourism.

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Last week saw two pieces of poor press for outbound UK tourism. A story originated by The Sunday Times and widely repeated elsewhere suggested that as part of the worst-case contingency planning Minister were due to consider the merits of issuing a warning not to book to travel post 29 March, should the UK find itself in a no deal Brexit. A Downing spokesperson said that this was “categorically untrue”. To my mind at least that still begs the question of whether that means: that there are no concerns about the worst-case impacts on travel, no plans to discuss these in Cabinet, or just no plans to issue a public warning?

Regardless, the damage is done and the media speculation will add to the existing Brexit inspired public uncertainty with, in all likelihood, further detrimental impacts on forward bookings for overseas holidays. This may or may not be good news for the domestic market, helping in part to counter some of the natural reaction to uncertainty which is generally to put off big-ticket decision making for as long as practically possible. In major parts of the domestic market that can mean safely delaying booking to nearer the time, or even until the very last-minute:

https://www.dailymail.co.uk/news/article-6500849/Tourists-warned-not-book-holidays-March-29.html

Meanwhile, the EU has just confirmed that UK citizens will in future have to apply for a three-year ETIAS (European Travel Information and Authorisation System) authority at a cost of c £6.  ETIAS allows entry in to the EU without visa and applies to citizens of over 60 countries, allowing visits for leisure or business for periods of up to 90 days (but not for work). ETIAS has been in the process of being introduced for several years and is currently due to come into forces in 2021.

It really shouldn’t be a total surprise that as residents of a non-EU, non-visa country, UK citizens will in future need an ETIAS.  At less than the cost of a cup of coffee a year it isn’t expensive.  The issue, if there is one, will be with be around process.  For most it should be a simple and take no more than a couple of weeks, although more complex cases could take several months to get security clearance.   It will require forethought on the part of the individual whenever planning to travel to the EU (as it does now to the US) and there could be major problems around the EU coping with volumes during the initial period of introduction.

Thankfully for the UK ETIAS is not yet in place, or we may have been faced with the prospect of everyone from the UK wishing to travel immediately post 29 March, potentially needing to apply in the relative short period left leading up to Brexit.  The introduction will come later but will then involve hundreds of millions of potential visitors from 60 plus countries, so look out for potential chaos ahead.

The real importance of the story lies in the its ability to add yet a further layer of uncertainty to issues around travel; travel which is of particular personal interest to almost everyone and as such of more immediate concern and far easier to understand than say the impact on UK business prospects or the impact on banking or the economy.  Such seemingly insignificant little stories have a habit of bring home to the public at large the reality that in a such an unbelievably complex situation like Brexit you can’t simply have your cake and expect to eat it:

https://www.schengenvisainfo.com/etias/

Recent VB Foresight editions and other research now available.

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I have added the December and November Foresight editions 162 and 163 and the November inbound trends quarterly to our protected members section. The trend quarterly provides detail of the IPS July to September and rolling annual totals which will be of general interest to some.

Foresight 162 looks at: Perceptions of getting a visa to Britain (a bit of a specialist topic?) and 162 is of far more general interest:  How the world views Britain – 2018. If nothing else you should read the headline summary at page 6 of this Anholt National Brand Index Survey report.  See para 2 and 3 of the our protected  VisitBritain page in the members section:

https://britishdestinations.net/members-area/content/visitbritain-november-2013-latest-edition-of-forsights-and-vb-trend-updates/

(members if you have forgotten the login email me).

I have also belatedly added a report to the research and statistics library giving insights into day tripping to and from cities and towns by international visitors to the UK. The executive summary pages 7 to 11 is well worth looking at regardless.  The main body text contains a great deal of detail, some of it specific to larger County areas and to a number of named destinations including some British Destination members:

https://britishdestinations.net/1194-2/content/summary-insight-on-overseas-visitors-to-the-uk-day-trips-2018/

 

Retail forecast for December 2018

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There has been a great deal of speculation in the National media about the continued pressure on traditional retail.  The source of the latest comment is the Springboard forecast issued, I believe, yesterday.  I am attaching the short 3 page summary, for those who don’t use the Springboard footfall system within their destinations or who for other reasons might not have seen the base document or other summary detail:

2018 Christmas footfall forecast 2018

Clearly the Christmas period is a critical time for many in bricks and mortar based retail.  Poor performance at this time of year can lead directly to a rash of closures post-Christmas when typically some of the biggest annual  bills need to be settled. This forecast adds to a raft of other concerns relating to maintenance of the urban destination product and the quality of place that underpins it.