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Month: April 2020

ASSC Sectoral Survey into Self-Caterer Access to Cover-19 Business Support: Week 3

Posted on by Fiona Campbell

The ASSC conducted a Scotland-wide sectoral survey relating to issues concerning eligibility and access to the various packages of economic support from the Scottish and UK Governments in response to the COVID-19 pandemic.

The online survey elicited 629 responses from self-caterers in Scotland, from both ASSC members and non-ASSC members alike, in 31/32 of Scotland’s local authorities.

The results offer valuable insights into the experiences and problems faced by Scottish self-catering operators in accessing the support required to safeguard their business in a sector that has been estimated to contribute over £723m each year to the Scottish economy.

Survey Overview

The ASSC ran a third round of their online survey consisting of 18 questions. This was publicised via ASSC newsletters, as well as on the ASSC’s social media pages on Twitter and Facebook.

In 24 hours, the survey generated 629 responses. 260 were from members of the ASSC and 369 responses were from non-members.

Association of Scotland’s Self-Caterers (ASSC) Chief Executive, Fiona Campbell, said:

“The results of this survey are deeply concerning and demonstrate that the short-term rental sector is in dire need of support and decisive action from government.

“That 63 per cent of operators in our sector still have not received the support that they are entitled to is indicative of just how many livelihoods are being jeopardised by government dithering and inaction – this simply cannot go on.

“Given that the traditional self-catering sector is worth £723million per year to the Scottish economy, failing to support it will have serious implications for economic recovery, our vital tourism industry, and the mental health of our operators and their families.

“Self-catering in Scotland needs government to step up now, if there is much more delay the consequences may be irreversible.”

Some of the key findings include:

  • Although there is some movement in terms of grant applications being approved, self-caterers from across Scotland are still experiencing difficulties in accessing business support grants from the Scottish Government that are being administered by local authorities.
  • 80% of self-caterers are rural or semi-rural.
  • 61% of respondents have operated for over 6 years.
  • 67% are pessimistic or very pessimistic about their businesses in light of Covid-19.
  • When asked about their mental health, 5% of respondents are experiencing new symptoms, 28% are experiencing mild anxiety / depression symptoms and 10% are ‘not sure what their emotional state is’.
  • 187 respondents (or approximately 37% of the total) have had their application for a business support approved by a local authority.
  • 248 (49%) have still got applications outstanding.
  • 22 respondents (4%) have had their applications rejected: Dumfries & Galloway, Argyll & Bute, Eilean Siar and Perth.
  • It is still not clear on what evidence will be accepted and what will not be. The guidance is being interpreted differently by respondents, local authorities and also accountants. Many do not feel that they will be eligible as they cannot evidence one third or more of earnings or 140 nights occupancy, but nonetheless it represents a significant part of overall income.
  • Concerns remain that some local authorities are not processing applications from self-catering accommodation until further guidance has been provided from the Scottish Government.
  • ASSC Sectoral Survey into Self-Caterer Access to Covid-19 Business Support Week 3

Bounce Back Loan Scheme announced for Small Businesses

Posted on by Fiona Campbell

The challenge facing so many businesses just now as they fight for survival in a very uncertain world is cash flow.

For some weeks the Government has had in place a number of significant measures designed to ease the cash flow pressure on businesses with a view to keeping as much of our wealth and job creating infrastructure intact until we get through this outbreak. Some of these measures are already having the desired effect especially deferring VAT payments, business grants and now much needed refunds of salary costs through the Job Retention scheme are beginning to flow with 500,000 claims made to date.

Coronavirus Business Interruption Loan Scheme

The one scheme which has attracted a lot of criticism has been the Coronavirus Business Interruption Loan Scheme (CBILS). The criticism has centred round the time it takes to access these 80% Government backed loans from banks and the viability tests that must be appliedbefore approving a loan.

We know that the banks and approved lenders are working hard to try and process as many CBILS loans as the rules permit – 20,000 loans have been made to date – and so yesterday the Government announced that it would introduce further measures to increase the ease by which businesses can access the CBILS. For example, the viability test will be changed so that all banks will need to assess is whether a business was viable pre-Covid-19. This is encouraging.

Bounce Back Loan Scheme

What was also encouraging yesterday was that the Chancellor, in recognising the importance of small businesses to our economy, announced a new fast track small and medium sized business loan scheme which is confidently called the Bounce Back Loan Scheme (BBLS). Although this gives us yet another acronym to remember, the positive news about the BBLS is that it should fast track access to additional funds within days in an attempt to replicate the speed and success of the Swiss loan scheme.

Almost every SME business can apply for the BBLS, with some limited exceptions, provided the business:

  • Is based in the UK
  • Has been negatively affected by coronavirus
  • Was not an ‘undertaking in difficulty’ on 31 December 2019
  • Has not already accessed a loan of up to £50,000 through CBILS although it will be able to transfer the CBILS loan into the BBLS before 4 November 2020

At this stage there has been no clarification on what defines an “undertaking in difficulty” but it is likely to mirror the new pre-Covid-19 viability test which applies to the CBILS. Therefore, if a business was making losses and struggling to meet its obligations as they were due before the outbreak, then they may well be excluded from being able to access the BBLS. Further clarification on this should follow shortly.

The key elements of the BBLS are:

  • The loan is capped at 25% of turnover and businesses will be able to borrow from £2,000 up to a maximum of £50,000
  • The lender will be provided by a 100% guarantee by the Government and there will be no fees, interest or repayments in the first 12 months
  • Businesses can apply online through a short and simple application form
  • Businesses can access these loans through a network of accredited lenders
  • The loan term will be for a period of up to six years and there will be a low standardised level of interest cost for the remaining period of the loan

Applications will open on Monday 4 May 2020.

Thanks to Johnston Carmichael for this advice. 

UK Government Support for Furnished Holiday Lets and the Self-Employed: Letter to the Chancellor

Posted on by Fiona Campbell

An open letter was today sent to The Right Honourable Rishi Sunak MP, Chancellor of the Exchequer on behalf of the estimated 60,000 professional self-catering operators, which form a vital component of the UK tourism industry, generating over £3.6bn per annum for communities throughout the UK.

While we welcome the packages that the UK Government has introduced to support businesses and the self-employed during the COVID-19 crisis, many self-employed self-catering operators are being informed by their accountants that they may not be eligible for the Self-Employed Income Support Scheme (SEISS) due to the technical exclusion of income reported in the Furnished Holiday Lets (FHL) boxes of their tax returns.

HMRC introduced the FHL rules to differentiate between professional self-catering operators and people letting second homes for a few weeks a year. Operators who comply with the FHL Rules are deemed to be operating “trading businesses” similar to hotels, while the income generated by people operating below the FHL threshold is deemed to be from “property investment” similar to landlords.

As professional self-catering businesses operating above the FHL threshold are deemed to be trading businesses, it is therefore eminently sensible that the income from these businesses is deemed to be trading income for the purposes to SEISS support.

We have asked for urgent confirmation that it is the intention of the UK Government to support professional self-catering operators in this way.

This was signed by:

Zac Stuart-Brown, Chair, Holiday Home Association
Alistair Handyside, Executive Chairman, Professional Association of Self-Catering Fiona Campbell, Chief Executive, Association of Scotland’s Self-Caterers
Anwen Jones, Chair, Welsh Association of Self-Catering Operators
Martin Sach, Vice Chair, Federation of National Self-Catering Associations
Kurt Janson, Director, Tourism Alliance
Marc Crothall, Scottish Tourism Alliance

The ASSC very much welcomed and appreciated that the Cabinet Secretary for Rural Economy and Tourism, Fergus Ewing MSP, wrote to Nigel Huddleston MP, Minister for Sport, Tourism and Heritage on 22nd April, noting that “we continue to receive a lot of correspondence from businesses which declare income on the property section of their tax return and so are excluded from the self- employment support for what they consider a technical rather than substantive reason.”

FHL Letter to Chancellor