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Local tourism business at a "disadvantage" over business rates

Created on 30/07/2018 @ 17:14
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Reform of business rates is needed to help local tourism businesses, according to Montgomeryshire AM, Russell George.
Questioning the Welsh Government's Cabinet Secretary for Finance, Mark Drakeford AM, Mr George has argued business rates for holiday let businesses need urgent reform. 
The present position means that some holiday lets businesses receive no business rate relief at all, putting them at a disadvantage, he said.
Mr George is now calling for reform to ensure that the small holiday cottage sector is supported and encouraged to grow so that it can survive and remain competitive in a sector which is becoming overcrowded with organisations such as Airbnb and other major online booking sites entering the market.
Mr George said: "I would like the Welsh Government to investigate how small business rate relief in the tourism sector can be reformed to support the small holiday cottage sector.
"Currently, a business with a cluster of cottages at a single location can receive no rate relief, whereas a second homeowner with a number of online bookings or buy-to-let investments, for example, pays less tax.
"This can't be right and is effectively a loophole that should be closed. Many of these cottages are genuine businesses who employ local people and use local services; have converted obsolete buildings; and provide additional facilities which enhance the quality of accommodation in areas such as Montgomeryshire."

He added: "I believe that the Welsh Government needs to investigate this situation now and as a matter of urgency to ensure that our tourism industry continues to thrive in five to ten years time and beyond.

"I will continue to raise these much-needed reforms with the Valuation Office Agency, Cabinet Secretary for Finance and the First Minister to ensure that we guard against this potential threat to the small holiday sector in Wales."

In response to Mr George, Mr Drakeford said: I thank Russell George for those follow-up questions. We have recently completed a consultation on reform of the appeals system in the business rate sector, and it is an area that is ripe for reform, and we do intend to bring forward proposals.

"We do not intend simply to import into Wales the check, challenge, appeal system as it has been applied in England, where there are many businesses who feel that the playing field has been tilted significantly against them and that their appeals are not fairly heard.

"So, while I agree with Russell George there is genuine room for simplifying the system, for making it more efficient, for eliminating appeals that never end up finally being heard, I still want to retain a system that is clearly fair to businesses who have a legitimate reason for making an appeal."

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