Campaign submits solution to tourism tax threat

The solution has been put forward by the Tourism Alliance, and is backed by a host of groups representing tens of thousands of members.

It follows a battle backed by the Yorkshire Post, urging the Government to review its plans to scrap tax privileges for holiday home owners in April.

The move will also affect self-catering accommodation owners, of which there are 2,500 in the region alone. But despite senior politicians welcoming the new solution, the Treasury says it is pushing ahead with its plans.

The policy director at the Tourism Alliance, Kurt Janson, has claimed the current changes could create an overall reduction in spending on tourism of 200m in Britain and a loss of nearly 4,500 jobs.

He said: "We are running out of time and it is extremely important the Treasury starts to take notice. We have a robust argument and are confident that our proposals work.

"We have been working with a number of parties and have a broad level of agreement that this is the right way to go."

The Government is introducing the changes to claw back millions of pounds from British holiday home owners abroad, following a ruling by the European Union that they should be entitled to the same tax breaks holiday home owners enjoy in the UK.

But self-catering accommodation owners are treated under the same tax bracket as holiday home owners, and despite often relying on their businesses for their livelihoods, the decision means they will also have their tax benefits removed.

The Tourism Alliance's proposal is to increase the threshold for properties to qualify for the tax breaks by having to be let for 15 weeks a year instead of the current 10 weeks per year.

It is claimed this will mean 75 per cent of genuine businesses will still enjoy tax breaks while 88 per cent of holiday homes abroad will not.

It is estimated this will cost the tourist industry 40m rather than the estimated 200m damage which is predicted under the Government's proposals.

The Conservative MP for Ryedale, John Greenway, who submitted a letter to the Government this week pleading for an overhaul of the proposals, said: "It is a very good solution and I would urge the Government to take notice of it. There is an issue of definition between holiday homes and self-catered accommodation and this will help solve it."

Chris Parkin, a committee member of the Tourism Association of North Yorkshire, added: "This is a step in the right direction and we welcome the proposals. It is well-thought through and is a very simple solution to this. The Government needs to stop looking the other way and start taking notice."

A Treasury spokesman said the Government is still planning to push ahead with the repeal of the current rules but would consider the Tourism Alliance's submissions. He said: "The policy decision to repeal from April 2010 was announced at Budget 2009. Draft legislation and an accompanying impact assessment and guidance were issued at Pre-Budget Report 2009.

"The Government has assessed all the viable options, taking into account its obligations under EU law, as well as its objectives on fairness, value for money, and its commitment to support UK tourism. The impact of this should not be taken out of context. Most tourist accommodation will not be affected by this change."