Furious holiday cottage owners have accused a council of using strong-arm tactics after they received a £7,900 bill for 'following Covid rules'.
Ieuan and Rhian Williams claim they were made to feel like criminals when they were frisked and searched following a court summons this week. The couple observed lockdown regulation in 2020 and fell foul of letting taxation rules as a result.
When more than half of their bookings were cancelled, they became liable for costly council tax, instead of business rates. Now, they say they are having to pay an additional premium because their let is classed as a second home, despite the fact that it's a converted horse stable on their own property, North Wales Live reports.
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They're concerned about their financial situation due to the fact that their annual profits amount to just £4,000. The Professional Association of Self-Caterers (PASC UK) said many other similar cases are popping up and are causing "mental health issues".
The chairman of the association accused the Welsh government of "moral reprehensive behaviour" by effectively "fining people" for following Covid rules in 2020. Ieuan, 66, is worried that he and his partner may have to operate their let for two years without receiving any profit due to the shocking bill.
“The way the council is acting is disgusting,” he said. “They’re using questionable tactics to extract money that is not due to them because we are awaiting the result of an appeal.”
Rhian, 64, invested her pension pot into the holiday let after she retired as a psychiatric nurse 10 years ago. They converted an old horse stable into a two-bedroom cottage just a few yards away from their home in Marian Cwm, Dyserth.
Ieuan claimed the council were eager at the time. “They even gave us a grant because they were keen to encourage tourism in the county,” he said.
According to the couple, the business turns over £12,000 a year while they commit two days a week to changeovers which include cleaning and maintenance. In 2020, they secured 113 nights in bookings, well above the 70-day threshold they needed to meet in order to pay business rates instead of council tax.
However, 58 nights were cancelled after travel restrictions were imposed during national and local lockdowns in Wales. Initially, the couple were handed a £5,500 bill which was later upped to £7,900. According to Ieuan, this represents three-year's worth of council tax payments.
However, according to PASC UK chair Alistair Handyside, because the couple exceeded the bookings threshold in subsequent years, they should not be paying council tax for these years. "Councils can’t penalise you for not hitting 70 days and then penalise you when you do exceed 70 days, he said.
"The legislation is absolutely clear on this. Nothing has ever upset the tourism sector as much as this attempt to fine people for complying with the law. It’s morally reprehensible.
“This is an ugly situation that’s only to get uglier. I’m seeing tourism business owners going back to Covid levels of mental health issues because of the way they are being treated.”
Ieuan said: "I was told it counts as a second home because it is furnished. So I told them I’d empty it.
"But they said it would still be classed as a second home. So I said I’d demolish it. They said I couldn’t until they sent a buildings inspector here!”
The couple were summonsed to Llandudno magistrates because a final payment warning arrived while they were on holiday. After meeting a council officer, they were advised to meet the authority's council tax officials to discuss payment plans, however, the couple want to wait for outcome of their VOA appeal and are prepared to go to court again.
In a letter to PASC, Wales' finance minister acknowledged that many accommodation providers in 2020 were unable to let their properties. However, she argued that demand shot up when lockdown curbs were eased and many lets were able to hit the 70-day threshold.
Despite this, as well as being let for 70 days, accommodation providers must also advertise their lets for at least 14- days each year which many businesses found impossible without breaking Covid rules, but they are still being penalised, according to Aberconwy Janet Finch-Saunders.
She further claimed that local authorities can use discretionary powers to "reduce a council tax liability by any amount, or disapply a premium". But she adds that not all council will take this approach.
“It has been made clear to me that at least one local authority in Wales is refusing to use its discretion,” she said. “When you have the VOA also stating its no discretion in applying the Welsh Government’s criteria, it is clear that the discretion needs to come from the Minister for Finance.”
A spokesperson for the Welsh government said: "We fully recognise what a difficult time this period was for businesses, and during the pandemic we provided more than £2.6bn in funding protecting more than 160,000 jobs. This money was intended to help mitigate the impact of national and local restrictions in place at various times, which were necessary to protect public health.
“The letting criteria are an essential part of developing a fairer housing market and ensuring that second home owners and self-catering businesses are making a fair contribution to their local communities. Despite the situation at the time, the majority of businesses were let for at least 70 days. Businesses were also able to operate when restrictions allowed and demand was known to be high.
“Properties are classified by the Valuation Office Agency and we’re continuing to work with the agency to monitor the ongoing impact of the pandemic on the classification of second homes and holiday lets. While we are unable to intervene in individual cases, local authorities have discretionary powers to reduce council tax bills and affected businesses may wish to get in touch with their council to ask whether support is available."
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