LOCAL MP JOINS FORCES WITH HOLIDAY COTTAGES GROUP TO SUPPORT RURAL TOURISM
July 21, 2009 11:20 AM
North Devon MP, Nick Harvey has given his full support to a new parliamentary motion, calling on the Government to review plans to repeal the Furnished Holiday Lettings (FHL) tax rules outlined in this year's Budget and consult with both tourism and rural stakeholders.
Nick comments: "These proposed changes were designed to tackle the problem of second homes not holiday rentals. However HMRC guidance notably fails to explain what will happen after 2010-2011 when the FHL rules are scrapped. The Government does not even know if the FHL rules are compliant with European law or indeed what European tax breaks will be available instead."
The early day motion was tabled following a campaign led by cottage holiday agency, Holiday Cottages Group (HCG) and the Tourism Alliance. They are concerned about the negative consequences the proposed changes will have on domestic tourism, in particular already hard-pressed rural and seaside communities.
Under the changes, owners of self-catering holiday accommodation will face a greater tax liability which could lead them to question the viability of their business. If just 10 per cent decide to cease trading as a result of the repeal of the FHL rules, UK tourism expenditure could decrease by almost £110 million each year and over 2,400 jobs could be lost.
Geoff Cowley, managing director of Holiday Cottages Group notes: "This policy is ill thought out and penalises the wrong people. It's not the large absentee second home owners, who may have been the Government's target, that will be affected but the individual owners of successful small letting businesses and rural communities whose income is largely dependent on them. We therefore welcome Nick Harvey's support."
The full text of EDM 1730 states:
That this House notes that the repeal of Furnished Holiday Lettings rules announced in the Budget will have negative and unintended consequences for providers of holiday lettings; believes that the negative impact of the repeal will lead to a reduction in the supply of self-catering accommodation in particular, resulting in a significant loss of jobs and damage to rural and seaside economies; further notes with concern the lack of any industry consultation on the repeal; and calls upon the Government to conduct a full consultation and review of this policy change as soon as possible to ensure all affected parties have the opportunity to voice their concerns and to promote an understanding of and mitigate against any unintended consequences on tourism, especially in rural and seaside areas.
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