Stop £10k grant to "pseudo" business second home owners in Gwynedd that have flipped to BR

The Issue

This is probably a low estimate but at least £15m - will be paid out from Gwynedd to second holiday home owners that have flipped their "pseudo" single second / investment holiday homes to business rates to avoid paying into the community, and the police, and will now benefit from this £10k grant - this is a stark raving bonkers situation. The money should be there for genuine, small businesses of which Gwynedd has a wide range of companies which should be benefiting from these grants, currently about to go under. You can't make this stuff up. 

The Welsh Assembly (labour run) devolved tax making in respect of council tax to local councils a couple of year ago. So the Gwynedd County Council (GCC) proposed and voted to council tax second homes to 150% - 17 councillors objected probably independent councillors. GCC, AM's, MP were informed of this incredibly damaging decision over 2 years ago and ignored it. Gwynedd has about 5,000 second homes (this is the first time we have had this figure!) more than any other county in Wales - and the GCC estimates the owners of between 1,500 and 1,800 of them may be registered as businesses (again this figure has not been divulged before, but surely this could be a little more accurate after all the difference is 300 x £10k = £3M! The power of the press versus the absurdity of a Freedom of Information request which gave no figures!).

I have asked for a Freedom of Information request on the exact figures - so far the first answer was that was not recorded see above! This beggars belief as the council sends out Council Tax and Business Rate bills and presumably has a commercial refuse collection contract with these "pseudo" businesses. So I find this rather difficult to comprehend why this data is not available.

See - https://www.bbc.co.uk/news/uk-wales-52316003

This needs to be stopped NOW as this money can't be recouped.

This also ignores the amount of money "lost" to the Council as people flipped and do not pay any tax at all on their property. This theoretical increase in revenue would be used to build affordable housing for locals - to date so much money has been "lost" that no affordable housing have been built or planned. If the GCC or the WA brought in a ruling that any houses flipping to business rates after 2015, without due diligence from the Council; to you and me checking that these were legitimate requests; and not just a request to effectively avoiding the increase in second home council tax (tax avoidance). In the majority of cases, these properties should not have been allowed to flip; those that have should be made to repay any rebates and historic council tax that should have been levied. If GCC do allow premises to flip to business rates for legitimate reasons, then the GCC should put a "property lien" on the property to make sure that the 18% or 28% business tax when the property is sold is partially recouped from the government and fed into the local Council. Simples.

When I brought this to the attention of my local Plaid MP I received the following answer (fair play this was at the start of the corona virus, but we have been discussing this for 2 years, so she knows the score):
"I have absolutely no idea whether council-tax flippers will be eligible for this (grant), and, frankly, at present this is not a priority concern."
In my book £15m would pay for a lot of PPE for front line NHS and Care home staff, but obviously not a priority!!!! Blaming the labour run Welsh Assembly is hardly answer as to why the power raising powers devolved to local councils should make Gwynedd increase tax by 150% on second homes and cause this amazing situation, it is a local problem.

Just a quick observation: I find it amazing that it is only now, that the corona pandemic is on us, are political movers and shakers taking note of this inept decision by the WA and GCC.

Please also sign - Scrap Business Rates: http://chng.it/szjwDqK4 

avatar of the starter
Alan Harper-SmithPetition StarterOwner of a Bed and Breakfast and Holiday Cottages Business in the glorious Llyn Peninsula.

1,858

The Issue

This is probably a low estimate but at least £15m - will be paid out from Gwynedd to second holiday home owners that have flipped their "pseudo" single second / investment holiday homes to business rates to avoid paying into the community, and the police, and will now benefit from this £10k grant - this is a stark raving bonkers situation. The money should be there for genuine, small businesses of which Gwynedd has a wide range of companies which should be benefiting from these grants, currently about to go under. You can't make this stuff up. 

The Welsh Assembly (labour run) devolved tax making in respect of council tax to local councils a couple of year ago. So the Gwynedd County Council (GCC) proposed and voted to council tax second homes to 150% - 17 councillors objected probably independent councillors. GCC, AM's, MP were informed of this incredibly damaging decision over 2 years ago and ignored it. Gwynedd has about 5,000 second homes (this is the first time we have had this figure!) more than any other county in Wales - and the GCC estimates the owners of between 1,500 and 1,800 of them may be registered as businesses (again this figure has not been divulged before, but surely this could be a little more accurate after all the difference is 300 x £10k = £3M! The power of the press versus the absurdity of a Freedom of Information request which gave no figures!).

I have asked for a Freedom of Information request on the exact figures - so far the first answer was that was not recorded see above! This beggars belief as the council sends out Council Tax and Business Rate bills and presumably has a commercial refuse collection contract with these "pseudo" businesses. So I find this rather difficult to comprehend why this data is not available.

See - https://www.bbc.co.uk/news/uk-wales-52316003

This needs to be stopped NOW as this money can't be recouped.

This also ignores the amount of money "lost" to the Council as people flipped and do not pay any tax at all on their property. This theoretical increase in revenue would be used to build affordable housing for locals - to date so much money has been "lost" that no affordable housing have been built or planned. If the GCC or the WA brought in a ruling that any houses flipping to business rates after 2015, without due diligence from the Council; to you and me checking that these were legitimate requests; and not just a request to effectively avoiding the increase in second home council tax (tax avoidance). In the majority of cases, these properties should not have been allowed to flip; those that have should be made to repay any rebates and historic council tax that should have been levied. If GCC do allow premises to flip to business rates for legitimate reasons, then the GCC should put a "property lien" on the property to make sure that the 18% or 28% business tax when the property is sold is partially recouped from the government and fed into the local Council. Simples.

When I brought this to the attention of my local Plaid MP I received the following answer (fair play this was at the start of the corona virus, but we have been discussing this for 2 years, so she knows the score):
"I have absolutely no idea whether council-tax flippers will be eligible for this (grant), and, frankly, at present this is not a priority concern."
In my book £15m would pay for a lot of PPE for front line NHS and Care home staff, but obviously not a priority!!!! Blaming the labour run Welsh Assembly is hardly answer as to why the power raising powers devolved to local councils should make Gwynedd increase tax by 150% on second homes and cause this amazing situation, it is a local problem.

Just a quick observation: I find it amazing that it is only now, that the corona pandemic is on us, are political movers and shakers taking note of this inept decision by the WA and GCC.

Please also sign - Scrap Business Rates: http://chng.it/szjwDqK4 

avatar of the starter
Alan Harper-SmithPetition StarterOwner of a Bed and Breakfast and Holiday Cottages Business in the glorious Llyn Peninsula.

The Decision Makers

Mark Drakeford
Mark Drakeford
Welsh Assembly - First Minister of Wales
Responded
July 2020 Dear Mr Harper-Smith I am writing in response to your petition about the treatment of second home owners in relation to the coronavirus non-domestic rates grant payments. Support grants are available to self-catering businesses, on the grounds they fall within one of the sectors most immediately affected by the coronavirus pandemic and make an important contribution to the tourism economy in Wales. However, the guidance accompanying the grant scheme provides local authorities with discretion to award the grant to a particular business and any additional evidence they require from business owners before making a grant award. These discretions extend to local authorities’ decisions about awarding grants to all businesses in the eligible categories, including self-catering accommodation. The guidance has been drawn up in consultation with a working group of local authority representatives and the Welsh Local Government Association. Updated guidance was provided to local authorities, which are responsible for the of this grant scheme. The guidance was amended following discussion with local authorities. Some rural authorities expressed concern about the potential for grants to be paid to second home owners who only occasionally let out their property. As of 20 April, in relation to self-catering accommodation, properties are not be eligible for the grant unless the following criteria are met: • The self-catering accommodation can produce two years’ of trading accounts directly preceding the current financial year; • The self-catering accommodation must have been let for a period of 140 days or more in the financial year 2019-20; • The self-catering accommodation business must be the primary source of income for the owner (minimum threshold is 50%). Local authorities have the full discretion to request and examine trading business accounts, booking lists and self-assessment tax returns submitted to HMRC for the financial year ending 31 March 2019 if additional evidence is required to demonstrate that this criteria is met. In cases where local authorities have decided to request additional evidence and the evidence shows that the scheme criteria are not met, local authorities are required to withhold payment of grant. The Welsh Government continues to liaise closely with the Valuation Office Agency regarding any developments in the nature of transfers between the council tax list and the non domestic rating list – such transfers can take place in both directions. The additional grant support is being provided to properties on the non-domestic rating list as at 20 March 2020. Properties added to the list after this date may only be awarded a grant at the discretion of a local authority. MARK DRAKEFORD
Dilwyn Williams
Dilwyn Williams
Chief Executive - Gwynedd County Council
Lord Dafydd Elis-Thomas
Lord Dafydd Elis-Thomas
Welsh Assembly Member - Dwyfor Meirionnydd - Deputy Minister for Culture, Sport and Tourism
Cllr Dyfrig Siencyn
Cllr Dyfrig Siencyn
Leader - Gwynedd County Council
Liz Saville-Roberts
Liz Saville-Roberts
MP Plaid - Dwyfor Meirionnydd

Petition Updates