Government support for furnished holiday lets in Wales, Scotland and Northern Ireland – Covid 19 - PKF Francis Clark
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Government support for furnished holiday lets in Wales, Scotland and Northern Ireland – Covid 19

My colleague, John Endacott, has summarised the key measures introduced by the Government to help holiday let (FHL) owners in England cope with Covid 19. As some elements of business support are devolved, what help can FHL owners in Wales, Scotland or Northern Ireland access?

UK-WIDE SUPPORT

The following measures are UK-wide so are available in Wales, Scotland and Northern Ireland as well as in England:

  • Access to bank finance through the Coronavirus Business Interruption Loan Scheme (CBILS)
  • A Coronavirus Job Rentention Scheme (CJRS)
  • Income support for some owners through the Self-Employed Income Support Scheme (SEISS)
  • Tax payment deferral
  • Support for businesses who are paying sick pay to employees

John Endacott provides useful commentary on the above measures in his article found here.

In what ways does the support differ across other areas of the UK?  The key message is that most support is UK-wide, but there are key differences in business rates holidays and the various grants available across the UK. So what are the headline areas for FHL owners across the UK?

BUSINESS RATES AND GRANTS

Business rates are a significant cost to any property based business. To help owners of business properties deal with the impact of Coronavirus, a number of different measures are to be implemented to provide a business rates holiday for most and the much-needed cash injection of grants.

The main differences across the UK countries are the way business rates holidays are going to be allocated and also on the grants available in your area.

Considering each country separately, here are some of the initial headlines. As with all grants there will be specific terms and different ways to apply – see your government website or local council for more information.

WALES

Retail, leisure and hospitality businesses with a rateable value of £500,000 or less will get one year business rates holiday in the 2020/21 financial year, meaning no business rates are payable for the next year. Your local authority will contact you.

The business rates system will be used to identify property owners qualifying for additional grants if you:

  • have a rateable value between £12,001 and £51,000 you will get a grant of £25,000.
  • qualify for small business rates relief (rateable value of £12,000 or less) you will receive a grant of £10,000. There is a multiple property restriction which means the same ratepayer may only receive the grant for a maximum of two properties in each local authority area.

Small business grants of up to £10,000 may also be available for businesses who employ up to nine people and applications are expected to be open from mid-April. Further details are awaited, including whether this can be accessed by those qualifying for the grants above. Larger grants are available up to £100,000 for businesses employing between 10 and 249 people which is expected to open for applications sooner.

SCOTLAND

Retail, hospitality and leisure businesses will get 100% rates relief provided the property is occupied. Properties that have closed temporarily due to the government’s Coronavirus advice will be treated as occupied.  The relief will automatically be applied to your bill by your local council, leading to no business rates payable for the next year.

Any such businesses with a rateable value of between £18,001 and up to £50,999 will be able to apply for a one-off grant of £25,000. These grants apply to caravans and self-catering accommodation that are the primary income for the ratepayer and are let out for 140 days or more in 2019/20.

A one-off grant of £10,000 will also be available to small businesses who get small business bonus scheme relief or rural rate relief.  You can only apply for one grant, even if you own multiple properties.  These grants can be accessed via a form on your local council website.

Since 6 April 2017, Scottish taxpayers have a separate income tax rates to the UK on furnished holiday letting income. However, they will also get to benefit from the deferral of the second payment on account due 31 July 2020, alongside other UK taxpayers.

NORTHERN IRELAND

The Northern Ireland rates system differs from other areas of the UK. Conor Murphy announced on 17 March 2020 that all businesses in Northern Ireland will pay zero rates for the next three months and rates bills will not be issued until June 2020. This is less favourable than other areas of the UK and, if the shutdowns have to continue, pressure may be made to extend this further.

Businesses in Northern Ireland can access the following schemes:

  • COVID small business grant – £10,000 to be issued immediately to all businesses with a rateable value below £15,000. Business with multiple premises will only be eligible for one grant of £10,000 in total. If you do not pay business rates by Direct Debit then you can register separately for the form online.
  • Hospitality, tourism and retail sectors grant scheme – an immediate grant of £25,000 will be provided to businesses with rateable value between £15,000 and £51,000.

AND FINALLY

John’s article sets out the key help which may be accessed by all FHL owners across the UK. If the shut-downs continue then further help may have to follow. At the moment it is key to access the help available as cash flow will be vital over the coming months.

As well as assistance with the new Coronavirus support packages, there may be untapped tax relief for capital allowances on fixtures (e.g. heating systems, lighting, electrics, fitted kitchens and bathrooms) and furniture in your property which would lead to a tax refund and further tax relief in the future. Such opportunities may be particularly relevant when cash flow is so tight.

We are here to provide help and support to your business through this difficult time. Further guidance and FAQs are available at our Coronavirus hub found here.

FEATURING: Heather Britton
Heather specialises in providing tax advice to companies and their directors/shareholders, as well as unincorporated businesses and property owners. She enjoys providing practical tax solutions,… read more
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