Millions of pounds in business and hundreds of jobs could be lost if the UK Government doesn’t change their stance on the decision to scrap tax concessions for people who run self-catering holiday homes.
The tourism sector will lose the tax concessions next spring as the chancellor was forced to comply with existing European legislation in his April Budget.
Current rules allow owners of furnished holiday lets to write off any losses made against personal income, for landlords operating a business for tax purposes.
The concession was brought in 25 years ago to stimulate investment in holiday accommodation and boost tourism in the UK, but now tourism industry leaders are calling for politicians to change their stance, warning that the new rule could potentially destroy a large part of the sector.
There are approximately 10,000 self-catering units in Scotland, estimated to be worth £302 million to the Scottish economy last year.
David Smythe, chairman of the Association of Scotland’s Self-Caterers said “The changes will mean less investment in self-catering and, in time, less availability. A fall of 10% would cost £200million a year in lost tourism spend and result in a loss of about 4,500 jobs in the UK, and 400 jobs in Scotland.”
The case has been taken up by Liberal Democrat MP Charles Kennedy and is presently awaiting a reply from the Treasury.
A spokesperson for the Scottish Government has said “We are aware of the potential damage the repeal of the rules may do. The minister for enterprise, energy and tourism has written to the Treasury urging that they reconsider this proposal, and we understand that Welsh and UK ministers have also written to the Treasury.”