A Business Like Any Other
EASCO works to remind and persuade authorities of all sorts that running self-catering holiday accommodation is a business like any other and should be treated accordingly for all forms of taxation, and in every other area where regulatory bodies interact with businesses. Self-caterers are not landlords, we don’t have tenants we have guests, we’re just like hotels except we don’t fry sausages in the morning!
Business Rates Reform
The system of business rates dates back centuries. In theory, each business pays a percentage of rateable value. Rateable value is what it would cost to rent those business premises from a landlord. In the case of self-catering holiday homes, there is no widespread market in holiday accommodation rented by operators and then sold on to holidaymakers on a short-term basis as holiday accommodation. The means by which the Valuation Office Agency seeks to calculate rateable value are complex, obscure, and inevitably, despite the agency’s best efforts, prone to anomalies.
The South West Tourism Alliance has sponsored a report from the South West Tourism Research Company that analyses the Valuation Office Agency’s published data for many thousands of properties in England and Wales The Impact of Business Rates Rises in the Self-catering Sector. The report shows that the sector is soon to be hit by a huge increase in rateable values, averaging 45%. It also shows the underlying failure of the VOA methodology to create rational valuations. The average rateable value per bed-space might be expected, in a rational system, to vary according to the size of a property or business in a consistent way, e.g. as businesses got larger, the average price per bed-space might fall, or rise, consistently. Instead, the data shows that the price per bed-space rises with size except that there is a sharp fall for businesses having 5-8 bed-spaces. Whilst this does not prove anything, it is an indicator of a failed method of calculation that does not achieve consistent fair results.
|Number of bed-spaces||Average value per bed-space|
You can download and read the SWTRC/SWTA report here: