FHL Rules Victory!!!!
Prior to the General Election in May, Parliament withdrew provisions in the Finance Bill that would have seen the FHL rules repeals. Responding to pressure from the Tourism Alliance, MPs from the Conservative Party and the Liberal Democrat Party succesfully removed the provisions from the Bill.
Tourism South East's Chief Executive Mike Bedingfield is a board member of the Tourism Alliance and he has used his position to consistently lobby the Treasury and the Conservative Party.
Budget 2010
In the emergency budget on 22 June 2010, the new Chancellor of the Exchequer, the Rt. Hon. George Osborne MP reiterated that the FHL rules are to be reinstated for 2010/11. However the budget also stated that there will be a review of the rules and their compatibility with EU regualtions. Tourism South East and our colleagues at the Tourism Alliance will be monitoring this situation closely to ensure that there is no detriment to the self-catering sector.
Tourism Alliance response
The Tourism Alliance Chairman Ken Robinson CBE is also a board member of Tourism South East. After the announcement that the proposed repeal was to be set aside in April, he had this to say:
"The decision not to repeal the FHL rules move is good for the UK tourism industry. The Conservatives backed our case, after the Treasury rejected the Minister's previous efforts to stop their ill-considered change. The highlights the extent to which the mandatory Economic Impact Assesment process has been abused to push through poor legislation. The must change if UK businesses are to provide the economic recovery the UK needs."
Lobbying History
Along with partner agencies and other business organisations Tourism South East to lobbied the Government for amendments to the decision to repeal the FHL rules.
The Tourism Alliance led negotiations with the Treasury, HMRC and the Tourism Minister. In partnership with other tourism bodies such as Tourism South East the Tourism Alliance recently made a formal submission to the Treasury regarding the FHL rules.
Read the Tourism Alliance submission here
Background
In his budget in March 2009 the Chancellor announced that he intended to repeal the Furnished Holiday Lettings Rules from the 6th April 2010. The reason given was that the current rules do not comply with European Union regulations.
The FHL rules allow properties that are being let as holiday accommodation for at least 140 days a year to be treated as a commercial business for tax purposes. This means that owners are able to claim loss relief, capital allowances and certain capital gains reliefs.
The repeal of these rules would have meant that operators would find it much harder to invest in improvements to the properties and would struggle to cover any losses incurred. It was feared that the removal of this status would significantly reduce the financial viability of many holiday lettings.
Also of concern to Tourism South East and other industry bodies was the wider impact that the closing down of holiday letting properties would have on rural and small village economies where holiday lets tend to be concentrated. Rural pubs, stores and attractions are already under considerable pressure so the removal of local accommodation businesses will impact upon their customer base and, therefore viability.