CORNWALL COULD LOSE 1.4 MILLION HOLIDAYMAKERS AND £422 MILLION NEXT YEAR

Campaign launched to avoid loss of up to 22,000 furnished-holiday-let properties in Cornwall

Cornwall could lose up to 1.4 million visitors and more than £422 million from next year if the owners of furnished-holiday-let properties are forced out of business by new tax threats.

With more than 22,000 furnished-holiday-let properties owned in Cornwall, tourism specialists fear that new tax plans will force many owners to abandon the holiday-let business.

According to Brian Payne, chief executive of South West accountancy firm, Bishop Fleming, which has a specialist hotels & tourism team: “For many owners of the 61,915 furnished-holiday-let properties in this region, the Chancellor’s surprise plan to remove traditional tax reliefs will transform their financial viability. That will force owners to consider withdrawing from the sector”, said Mr Payne.

“This is not just a threat to second-home owners – it can have just as much impact on self-catering units and static caravans. Added together, these properties provide a huge proportion of the region’s holiday accommodation”, he added.

Based on an average letting period of 16 weeks, and an average of four beds per property, the affected furnished-holiday-let properties represent accommodation for 3.95 million visitors to the South West each year.

South West Tourism records for 2007 show that visitors booking furnished-holiday-let accommodations spend an average of £302 each.

Cornwall is most at risk, with 22,070 properties in the furnished-holiday-let sector, providing accommodation for 1.4 million visitors on Bishop Fleming’s conservative estimate of 16 weeks lettings for an average of four people per unit. That puts more than £442 million at risk.

Currently, the providers of furnished holiday lettings benefit from reliefs on income tax, capital gains tax, inheritance tax, and pension contributions. In his recent Budget, the Chancellor said that, from next April, all those reliefs are to be removed.

“For decades, those tax reliefs have been a significant help in enabling owners to invest in their properties, and to smooth out the huge swings in lettings-income from one year to the next in a region that is so weather dependent”, said Mr Payne.

As the accountancy firm with the widest spread of offices throughout the South West, Bishop Fleming is actively lobbying for a Government re-think.

“We are liaising with the region’s tourism agencies, and have already written to the Chancellor and to the Minister for the South West, Ben Bradshaw MP”, said Mr Payne.

Malcolm Bell, Chief Executive of South West Tourism has welcomed the Bishop Fleming lobbying initiative. “Furnished holiday lets are a vital contributor to the region’s economy. The millions of holidaymakers who rent them bring massive spending power to our local shops, visitor attractions, and restaurants”, he said.

“The owners of these properties operate as businesses: they pay business rates and other business related taxed, and should continue to be treated as businesses”, said Mr Bell.

Bishop Fleming’s Brian Payne said: “There can be no suggestion that those receiving the tax reliefs are not bona-fide holiday-letting businesses. The Government introduced strict rules on minimum genuine letting periods back in the 1980s, which have been very effective in preventing abuse.”

Furnished-holiday-let accommodation (self-catering units, static caravans, and second homes):

Cornwall:
22,700 properties
1.4m visitors’ accommodation (assuming 16 weeks’ letting and average of four occupants.

Devon:
21,754 properties
1.39m visitors’ accommodation (assuming 16 weeks’ letting and average of four occupants.

Dorset:
9,630 properties
616,320 visitors’ accommodation (assuming 16 weeks’ letting and average of four occupants.

Somerset:
3,825 properties
244,800 visitors’ accommodation (assuming 16 weeks’ letting and average of four occupants.

Avon:
1,224 properties
78,336 visitors’ accommodation (assuming 16 weeks’ letting and average of four occupants.

Gloucestershire:
2,235 properties
143,040 visitors’ accommodation (assuming 16 weeks’ letting and average of four occupants.

Wiltshire:
1,177 properties
75,328 visitors’ accommodation (assuming 16 weeks’ letting and average of four occupants.

This entry was posted on Friday, May 8th, 2009 at 11:10 am and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed.