Many self-catering operators across Wales are being hit with retrospective council tax bills because they could not let their property sufficiently during the pandemic and missed the required threshold to remain eligible for business rates.
For a property to be classed as self-catering accommodation, it must be let for a minimum of 70 nights a year, but in 2020-21 many businesses failed to meet the threshold largely due to lockdowns, Covid restrictions and in some cases owners themselves catching Coronavirus.
In 2020-21, Wales spent eight months of the year under national lockdown in addition to local lockdowns, shielding, travel bans, advice to avoid public transport and limits on households mixing, which all deterred the public from going on holiday.
Currently, Holiday lets achieving a minimum of 70 nights let are eligible for business rates, which during the pandemic was set at 0%, but businesses which failed to meet the threshold in 2020-21 are now receiving council tax bills for thousands of pounds for 2020-21, but also 21-22 and 22-23. In some local authorities this includes a council tax surcharge of up to 100%.
A survey of its members by the Professional Association of Self Caterers reveals that the average self-catering property was let for as few as 61 nights in some local authorities. The average for properties in Gwynedd was 69 nights.
The Wales Tourism Alliance (WTA) UK Hospitality Cymru and PASC UK have appealed to Welsh Government to intervene, but Minister Rebecca Evans MS is directing businesses to appeal to their local authority, which has the power to offer council tax exemptions. In her response, the Minister said, “If a self-catering property became classified as domestic because its compliance with the letting criteria temporarily lapsed, local authorities may use their discretionary powers to reduce a council tax liability by any amount.”
Ramon Barnes from Nannerch near Mold in Flintshire lets out his nextdoor property as his sole source of income. During 2020-21 the property had 90 days’ worth of cancellations due to Covid and was let for 64 days.
Mr Barnes said, “During Covid, I followed the rules. I didn’t let the house out when lockdowns prevented it (removing 94 days of bookings) and I chose not to increase my rates due to Covid, when many others did.
“We managed to let the property out for 64 days by working non-stop. I thought that following the rules and helping families have a well-earned holiday was the right thing to do.
“Now I’ve received a Council Tax bill for 2020/2021 of nearly £3,000 because I didn’t let the property for the required 70 days, when that same council didn’t let me achieve it.
“I feel outraged and disillusioned that the Welsh Government have allowed this to happen.”
Janet Tarrant lets out a barn conversion next-door to her home in Pwllheli, which was let for over 100 nights in 2019-20 and 2021-22, but in 2020-21 due to covid restrictions was let for just 60 nights after nearly 60 cancellations.
Ms Tarrant said, “Like the owners of holiday lets all over Wales, I abided by the restrictions and took precautions to keep guests safe, but now feel like I’m being penalised for doing the right thing.
“With national and local lockdowns, travel bans, shielding and other restrictions, it was impossible to meet the 70-day threshold for business rates during the first year of the pandemic.
“I left a day between bookings to deep clean the property before the arrival of new guests thinking this was a sensible precaution to keep people safe, but now holiday let owners are paying the price.
“I was expecting a business rate bill of zero during the pandemic, but to receive a retrospective council tax bill of thousands of pounds feels deeply unfair. I hope councils will look favourably on the situation that many small business owners now find themselves in.”
Adrian Greason-Walker, Policy Advocate for the Wales Tourism Alliance, said “The Wales Tourism Alliance has worked closely with small tourism businesses across Wales to review how they have been impacted by this unacceptable situation.
“Small business owners did the right thing adhering to restrictions and following recommended guidance from Welsh Government during the pandemic to protect guests, staff and others and we are now receiving reports of small holiday letting businesses being penalised for doing so.
“This is extremely unfair. Welsh Government has made it clear that it has no intention of intervening to correct this so we now appeal to local authorities to use their discretion in exempting these small businesses from council tax for 2020-21.”
Notes to Editors:
A survey of hundreds of members by the Professional Association of Self-Caterers revealed the average number of nights a property in Wales was let in 2020-21 was 73.
In 2020-21, self-catering accommodation was under enforced lockdown from 1st April – 10th July (101 days), 23rd Oct - 9th Nov (18 days) and from 19th Dec – 31st Mar (103 days).
Holiday lets were also impacted by the lockdown in England from 5th Nov – 2nd Dec (a further 22 days) and the ban on travel into Wales from certain areas of England from 4th Dec (a further 16 days).
By the time local authority lockdowns are taken into account, in some council areas, accommodation could trade for fewer days than the required threshold of 70 nights.
In addition, there were restrictions around shielding, self-isolation, guidance to avoid public transport and legal limits on the number of households which could meet, which all limited bookings in 2020-21.