The current criteria for eligibility:
“Self-catering accommodation and caravans are considered eligible for grant funding if receipts represent a primary source (for example, one third or more) of earnings for the ratepayer and the property has been let out for 140 days or more in financial year 2019-20.
“And the 140 day stipulation has been firmly agreed in order to target grant eligibility on those businesses which have a clear financial dependency on this income” (Senior Tourism Policy Adviser, 1st April)
There appears to be ongoing confusion around the precise meaning of the ‘140 day’ criterion that has been established. In a recent letter from the Cabinet Secretary for Rural Economy and Tourism to Beatrice Wishart MSP (21st April), he comments:
“I am also aware of the points raised by the self-catering sector, and the Scottish Government has been working with the Association of Scotland’s Self Caterers (ASSC) to help address some of these concerns. The criteria for accessing funding is clear and while I will not reiterate all of the criteria in this letter I thought it important to clarify that properties need to have been made available to let, and not necessarily have been let, for the 140 days. This is a common query that has been raised and we are working with the ASSC to ensure there is clear communication between the sector and local authorities. I would encourage your constituents, however, to examine the criteria and to apply if they believe they are eligible.”
Mr Ewing’s interpretation is different to the existing criteria.
A self-catering business must be available to let for over 140 days in order to be on Non-Domestic Rates. That is the base criteria. We had suggested to the Scottish Government that applications for grant support should be backed up by evidence of being actually let for 70 days, as per Barclay recommendation 22 that came into legislation on 1st April 2020. Unfortunately, this has fallen on deaf ears.
Primary Source of Income
In terms of evidencing the one third of earnings, there is also confusion as to what should be provided. The problems/questions arise from the use of the word “earnings” by the Scottish Government, which is unhelpful. Some local authorities are looking for one third or more of profit, Stirling Council has asked for evidence of one third or more of joint household income, not just the ratepayer’s earnings. As an example of how local authorities are interpreting the guidance differently, City of Edinburgh Council is asking for evidence of self-assessment for 2019/20 (despite the fact that the tax year has only just ended, so no one has done their tax assessments yet), demonstrating that FHL is 40% of total earnings and occupancy of over 200 nights: both criteria totally outwith the guidance.
ASSC has spoken to several accountants who are also interpreting the criteria differently, and operators don’t believe they are eligible because they fear they don’t meet the criteria.
One Grant per Business
“Due to finite resources and the scale of the current challenge, we’re targeting Business Grant funding to support small businesses and those medium sized businesses in the retail, hospitality and leisure sector who are liable for non-domestic rates to maximise the number of businesses we can support. One grant is available per property where the ratepayer has one property, and for those with multiple properties it is one grant per business.” (Senior Tourism Policy Adviser, 1st April)
Ratepayers with more than one business have had grant applications rejected on the basis that grants are available on a ‘one grant per ratepayer’ basis.
On 24th April, Claire Baker MSP asked a Parliamentary Question regarding the eligibility criteria guidance for self-catering businesses. The Cabinet Secretary for Tourism and Rural Affairs answered by saying
“On the level of financial support for self-catering properties that are someone’s main livelihood—rather than an Airbnb-type activity or hobby—it is absolutely right that such businesses receive a package of financial support to help them weather the storm. That is why, after listening carefully to the response of the tourism and self-catering sector to the initial package of support, my colleague Kate Forbes announced an additional package of £220 million. As Claire Baker and, I suspect, other members are well aware, that means that, as well as the initial grant, there will be further grants per property—not just one per business—at a rate of 75 per cent. I think that that is a fair outcome.”
This clearly states that grants are available for one per business, not one per ratepayer, with the secondary grant available for second properties belonging to a business.
There is no appeal process in some local authorities as there is no Government requirement to have any form of appeal.
Whilst we welcome that local authorities are expected to show discretion in a rural context where self-catering supports other business initiatives, we think it would be helpful for the Scottish Government to offer clearer guidance.
It is clear that local authorities are misinterpreting the current guidance. And this is indicative of the very serious situation that many small businesses find themselves in.
As a result of the eligibility criteria, our sector is being hugely disadvantaged compared to any other small business in Scotland and any other self-catering business in the rest of the UK.
If the criteria were to be relaxed, many professional operators and perfectly eligible businesses would be able to achieve the support that they are undeniably due.
On 31st March, the ASSC suggested to the Scottish Government that the following evidence may perhaps be preferable:
This would evidence an active income stream from self-catering and should not be onerous for an operator.
We will continue to press for further guidance.
Association of Scotland’s Self-Caterers