Self catering holidays in Welsh could be hit by tax changes
Trade associations representing professional self-catering businesses in Wales say “punitive” tax changes due to be introduced next year could see as many as a third of them close or sell up.
Currently, self-catering properties in Wales must be available to let for a minimum of 140 days in any 12-month period, and actually let for at least 70 days to qualify for business rates rather than council tax.
Under the new proposals, properties must be available to let for at least 252 days and actually let for at least 182 days to qualify for business rates – an increase of 160 per cent.
From April 2023, a self-catering business not meeting the new threshold would incur council tax as a second home, instead of business rates. Welsh county councils will have the power to increase council tax on all these businesses by up to 300 per cent.
It could mean Shropshire holidaymakers find it harder to get holiday accommodation if the number of properties shrink.
Wales Tourism Alliance, The Professional Association of Self Caterers UK and UK Hospitality Cymru hope to meet Rebecca Evans, Minister for Finance and Local Government, early next month to they say protect real Welsh self-catering businesses.
The group surveyed more than 1,500 self-catering businesses across Wales.
A letter to the Welsh Government, says: "This all-Wales, one size fits all approach takes no account of the different kinds of businesses that operate in a seasonal Welsh tourism year.
“Nor does it respond to the fact that the problem this proposes to solve does not affect the whole of Wales, something the Welsh Government has, itself, recognised.
“Our data shows that more than 30 per cent of professional, local self-catering businesses will face having to sell or close because of this legislation. These are not second home owners.
“We are now asking the Welsh Government to formally sit down with us to review and agree what the essential and justifiable exemptions and mitigations might be, in order to ensure that real businesses are not caught in the consequences of this new threshold.”
The associations are asking for a transition period of two or three years to introduce the changes, up to 18 exemptions and dispensations for businesses carrying out repairs and refurbishment, property improvements or being forced to close due to ill-health or caring responsibilities.
They also want self-catering businesses to have an appeal process against the 182-day threshold in exceptional circumstances and question how councils plan to tax properties that it currently doesn’t know about, such as those relying solely on online listings with global companies.
