Outrage at second home owners claiming £10,000 taxpayer-funded emergency grants

Desperate bed and breakfast businesses are "outraged" at neighbouring second home owners being able to claim from a Government coronavirus grant scheme they have been excluded from.
Robin's Hood Bay is among the picturesque Yorkshire locations popular with second home owners. Picture: James Hardisty.Robin's Hood Bay is among the picturesque Yorkshire locations popular with second home owners. Picture: James Hardisty.
Robin's Hood Bay is among the picturesque Yorkshire locations popular with second home owners. Picture: James Hardisty.

The B&B Association has written an open letter to every MP about the plight of more than 10,000 bed and breakfast businesses - including hundreds in Yorkshire - that are currently unable to claim from a Government £10,000 grant scheme as they pay council tax rather than business rates.

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"The genuine B&B businesses losing out have been dismayed - even outraged - to read reports about second-home owners who have registered for business rates to save tax being eligible for the grants for their second homes," it says.

Bed and breakfast owner Fiona Gardham is among those questioning why second home owners are able to claim from a grant scheme set up to help small businesses.Bed and breakfast owner Fiona Gardham is among those questioning why second home owners are able to claim from a grant scheme set up to help small businesses.
Bed and breakfast owner Fiona Gardham is among those questioning why second home owners are able to claim from a grant scheme set up to help small businesses.
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"Such anomalies add insult to injury. The grants were intended for small hospitality businesses."

The association's letter adds: “Over 10,000 B&Bs across Britain (including 51 per cent of our members) pay council tax rather than business rates and on this ‘technicality’ are currently denied the Covid-19 grants intended for small hospitality businesses.

“They are in a desperate situation, with no income, and urgently need the grants which surely were intended for small businesses like them.

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“B&Bs paying council tax are doing so quite correctly and legally and have often been advised to do so by their local authority or Valuation Office Agency officials.

“Many are paying more than other similar B&Bs who are getting full small business rates relief.”

The Association is calling for the policy to be changed so those B&Bs paying council tax can also claim the grants. It has highlighted Office for National Statistics data which says the country’s 36,000 B&Bs turn over £3.6bn per year and provide livelihoods for more than 60,000 people.

“Small B&Bs are the cornerstone of the UK's tourism industry and a vital part of the fragile economy of many rural and coastal areas. Britain will need the contribution of its Bed & Breakfast businesses as and when we recover after the coronavirus crisis,” the letter says.

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One B&B owner currently excluded from the Government grant scheme is Fiona Gardham, who runs the Eighteen97 B&B in the North York Moors village of Goathland (most famous as the filming location for Heartbeat) with her husband Tim.

She said on their street alone, five of the 14 properties are second homes and added the situation with the grant system has left a bitter taste in the mouth.

“B&B owners generally work seven days a week most of the year and have been frozen out of the grant scheme even though we are paying thousands in council tax to support local services,” she said.

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“Then second home owners who contribute nothing to the local economy are getting £10,000. Do they really need it when so many small businesses, not just B&Bs, are being missed out?”

With second home owners not currently required to show any proof of lettings to prove their property is a commercial venture, Gardham said the grant system is open to abuse.

“I don’t begrudge any genuine business getting the grant if they need it to survive,” she said.

“But when it is given to people without them having to provide any sort of proof of it being used for business, I think it is an absolute waste of public money.”

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A spokesperson for the Department for Culture, Media and Sport, which has been discussing the issue of bed and breakfasts that pay council tax being excluded from the grant scheme with the B&B Association, said: "We are supporting our world-class tourism sector through these challenging times and have announced an unprecedented government package to help businesses, workers and organisations.

"Those not eligible for business rates relief may be able to apply for financial assistance through the Self-Employed Income Support Scheme and we’ve also deferred the next quarter of VAT payments for firms until the end of June.

"We continue to engage with the industry to understand the ongoing impact of the virus and urge tourism businesses to apply for support through the relevant funds."

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