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Scottish and UK Government Support: Businesses ‘Falling through the Gaps’

We welcome the work that the Scottish and UK Governments have undertaken so far to support businesses and communities in Scotland.

Unfortunately, ASSC Members are experiencing a variety of scenarios where their Furnished Holiday Let business means they are falling through the gaps between the Coronavirus Job Retention Scheme (CJRS), Self-Employed Income Support Scheme (SEISS) – which are provided by the UK Governmentand Small Business Grantsfrom the Scottish Government that are being administered by local councils. In addition, everyone is aware of the issues concerning the Coronavirus Business Interruption Loan Scheme (CBILS). As far as bank support is concerned, debt is still debt, and many small businesses will not be able to service such loans.

  1. UK Government Support: FHL, CJRS & SEISS

Appreciating that the FHL tax rules, the CJRS and SEISS are the responsibility of HM Treasury, we wish to flag these to the attention of the Scottish Government, which we hope that they in turn will raise with UK Government Ministers.

Support for Furnished Holiday Lets

In order to qualify as trading businesses under the Furnished Holiday Let (FHL) tax rules, a property must be available for let for 210 days and actually let for 105 days.

Coronavirus Job Retention Scheme (CJRS) Read More

If you are trading through a limited company and taking a low salary then accessing the CJRS personally is likely to be difficult. You can’t work when furloughed and so it is hard to see how a director/shareholder can satisfy that requirement. Further, 80% of a low salary is not very much. If you are trading through a limited company and not taking salary, you will not be able to access CJRS. Instead, you might need to consider a Universal Credit application.

Self-Employed Income Support Scheme (SEISS) Read More

The SEISS is available to the self-employed or a partner of a trading partnership. Furnished Holiday Let income is not deemed to be self-employed income, so operators will most likely not be eligible for this personal support.

  • The issue here is that this scheme is designed to take the information from the trading pages of self-assessment tax returns and not the FHL boxes on the property pages.
  • The position isn’t completely clear as limited detail is available but there was an apparent linkage to national insurance payments and this scheme in the UK Chancellor’s announcement.
  • It is entirely possible that the position of FHL business owners has just not been considered.
  • If you don’t qualify then once again, your only option is to apply for Universal Credit.

2. Eligibility Criteria for Self-Catering Grants from Scottish Government – Read More

The ASSC’s key concern remains the disparity with the rest of the UK in terms of grant support for the self-catering sector. We have been told by officials at the Scottish Government that “Scottish Government local government finance colleagues have been busy working with councils to ensure that their guidance is applied in a consistent way regarding how the income criteria can be evidenced and are looking to resolve any discrepancies as soon as possible to support applications”. Local authorities are, however, adopting different approaches, which will disadvantage people in different local authorities.

  • The latest incarnation of the self-catering grant still leaves many self-catering operators ineligible due to the diversified nature of their income stream.
  • The eligibility was amended to being reliant on the property being part of a ratepayer’s primary source of earnings (one third or more) and that the property is let for more than 140 days in the financial year 2019-20. With the latter point in particular, the Scottish Government have not yet addressed the point that the financial year has only just ended and audited accounts will not have been produced, and bookings for March/April 2020 are non-existent.
  • Evidencing occupancy of over 140 days during the financial year 2019-20 is not only inappropriate because the year has only just ended, but also because the Scottish Government ordered us to shut our businesses down in March.
  • In addition, many operators in rural parts have a limited season which precludes that figure being met: “This is most unfair. The ruling penalises owners of properties which are far distant form centres of population. In the far North West of Scotland the letting season is comparatively short and most properties, including ours, are rented for less than 20 weeks per year, and so do not qualify for compensation. Self-catering operators in the areas such as Sutherland are very angry about this discrimination.”
  • Local councils have not been supplied with proper guidance from the government about how the income criteria can be evidenced, and some are compromising GDPR compliance in doing so.
  • Local authorities have noted that there is nothing within the guidance that gives any scope for appeal, which is a huge concern. Their only discretion relates to who the ratepayer was on 17thMarch 2020, but this does not necessarily reflect a husband and wife who operate two (or more) small businesses, but for ease of administration, both properties are on the rates roll under one name.
  • Many have already received rejections to applications from local authorities who are implementing the scheme on behalf of the Scottish Government

Questions for the Cabinet Secretary:

  • Why is there no parity of support between Scottish self-caterers and those in England and Wales?
  • Given that local authorities are not administering the grant funds in an equitable manner, will the Scottish Government provide guidance to ensure that self-caterers are treated fairly throughout Scotland?

3. Corresponding Member Issues Directly with Scottish Government

 We understand that Members raising their individual issues and concerns with their MSP and MP are now causing a backlog because of the quantity of correspondence.

We do appreciate the number of representations that will have been made, based in the growing anxiety from across the sector.

Unfortunately, where Members are receiving a response, it is usually in the form of ‘blanket correspondence’ from the Scottish Government which is not relevant to the individual’s enquiry, nor does it answer the specific concerns or reassure that support will be forthcoming.

ASSC Members, and others in the self-catering sector, need clarity and transparency from government.

We welcomed Fergus Ewing’s correspondence to the ASSC, dated 6th April, which stated “I recognise that there continue to be gaps in the support, we are working to further address these. I hope this provides some reassurance to you at this difficult time. Please do continue to work closely with my officials.”

Questions for the Cabinet Secretary:

When will the Scottish Government provide people with clarity around the following issues:

  • What ‘gaps’ are they going to provide support for?
  • What ‘gaps’ are they not going to provide support for?
  • What timescales are they working to?

In an email to ASSC on 3rd April from Scottish Government officials, we were informed that: “The very wide-ranging nature of our policy brief, and the number of items of correspondence we are currently receiving, makes it very difficult to have clear lines of sight in terms of raising and addressing matters more widely.  It is very helpful for us to receive these points through a single point of contact so that we can use our best efforts to achieving the speediest, and most beneficial solutions in what are very challenging times for all of us.  The Scottish Tourism Alliance has furnished us with an issues log, which we have found very useful, and it may be something that the ASSC could consider.”

The ASSC represents 665 members. We are collating feedback from our members and presenting them as evidence to the Scottish Government. Appreciating the magnitude of the task on everyone’s hands, guidance on how best to communicate our concerns would be appreciated.

Question for the Cabinet Secretary:

The ASSC may shortly have to furlough 2 of its 3 staff due to membership subscriptions not being able to be paid, regional event cancellations & loss of sponsorship. If this is the case, the ASSC membership will be left without effective representation. This is being replicated in other membership organisations.

  • Is the Scottish Government looking to support industry representative organisations during this crisis?
  • Will the Scottish Government fund the ASSC to be able to provide administrative assistance to collate the suggested ‘issues log’ to facilitate Scottish Government to work through Member issues?

4. NHS Homes / Accommodation for Key Workers

In this unpredictable and unprecedented time, we are relying on our NHS staff, our supermarket and transport workers, our delivery drivers and our police and military personnel, who are working long hours to ensure that we still have the services and resources we need to get through this. The ASSC has sought clarity from the Scottish Government regarding its position on the accommodation of key workers who cannot necessarily stay at home, or need to stay closer to their place of work. The self-catering sector is well placed to provide this accommodation, but we believe there should be a considered approach, with the endorsement of the Scottish Government. The ASSC has put forward a proposal, in line with the scheme that is being delivered in England by our colleagues at the Short-term Accommodation Association. 

Question for the Cabinet Secretary:

When will the Scottish Government respond to calls for clarity on accommodation provision in self-catering units so that we can support our key workers appropriately?

Fiona Campbell

Chief Executive

Association of Scotland’s Self-Caterers

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