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Treasury Select Committee’s investigation into the Self-Employed Income Support Scheme and Furnished Holiday Lets

The Treasury Select Committee launched the first stage of an inquiry on 18th  March, when it issued a call for evidence on the speed, effectiveness and reach of the UK Government’s and Bank of England’s immediate financial responses to coronavirus. The Committee will continue to highlight gaps in support to the Treasury.

The Association of Scotland’s Self-Caterers (ASSC) is the leading source of knowledge on short-term letting and holiday homes in Scotland. Traditional self-catering forms a vital component of the Scottish tourism industry and represents £723m to the Scottish economy. The ASSC has submitted evidence to the Treasury Committee inquiry.

The ASSC welcomes the Treasury Select Committee’s investigation into the Self-Employed Income Support Scheme and Furnished Holiday Lets.

Since the designation of COVID-19 as a notifiable disease in England on 5 March, and the subsequent closure of self-catering properties, thousands of small holiday let businesses across Scotland which have incurred catastrophic losses are unable to claim for loss of income due to the confines of the SEISS.

While we welcome the packages that the UK Government has introduced to support businesses and the self-employed during the COVID-19 crisis, many self-employed self-catering operators are being informed by their accountants that they may not be eligible for the Self-Employed Income Support Scheme (SEISS) due to the technical exclusion of income reported in the Furnished Holiday Lets (FHL) boxes of their tax returns.

HMRC introduced the FHL rules to differentiate between professional self-catering operators and people letting second homes for a few weeks a year. Operators who comply with the FHL Rules are deemed to be operating “trading businesses” similar to hotels, while the income generated by people operating below the FHL threshold is deemed to be from “property investment” similar to landlords.

As professional self-catering businesses operating above the FHL threshold are deemed to be trading businesses, it is therefore eminently sensible that the income from these businesses is deemed to be trading income for the purposes of SEISS support.

The ASSC very much welcomed and appreciated that the Cabinet Secretary for Rural Economy and Tourism, Fergus Ewing MSP, wrote to Nigel Huddleston MP, Minister for Sport, Tourism and Heritage on 22nd April, noting that “we continue to receive a lot of correspondence from businesses which declare income on the property section of their tax return and so are excluded from the self- employment support for what they consider a technical rather than substantive reason.”

Many self-catering businesses in Scotland have found themselves unable to access financial support from the Scottish Government’s Small Business Grants scheme due to the overly onerous eligibility criteria, whilst insurers are refusing to cover business interruption. Subsequently, many businesses find themselves entirely unsupported during this torrid time.

We therefore urgently seek confirmation that it is the intention of UK Government to support professional self-catering operators by including FHL income in the SEISS. These businesses are an important part of the tourism industry, which we need to survive in order to rebuild the economy and local communities.

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