Over £100 million in Covid aid given to second homers – Chancellor should claw it back.

Posted on: 26th February 2021

Revealed – over £100m of Cornwall’s covid aid claimed by second home owners. It should instead be used for locals in housing need. I’ve also asked one Conservative MP second homer to back my call.

Over £100 million of Cornwall’s Covid aid money has been handed out to second home owners since the first lockdown. Former local MP, Andrew George, is calling on the Chancellor to use next week’s Budget to insist that this money is paid back to instead fund over 3,000 social homes for locals, and that the tax loophole which has created this scandalous situation should be immediately closed.

Mr George has also contacted a Tory MP with a second home in the west Cornwall constituency to urge him to set an example by supporting the call. Mr Mark Garnier (Con MP for Wyre Forest in Herefordshire) has a second home/holiday accommodation in Newlyn, west Cornwall.

Mr George revealed that official figures supplied in response to his questions to Cornwall Council this week show that the four Covid Aid payments over the last year to second/holiday home owners have now reached a total of £133 million. Whilst a portion of those which were eligible for this element of Covid Aid are wholly holiday businesses Mr George points out that the majority are not. Indeed about half the accounts have addresses outside Cornwall.

Mr George successfully led the Parliamentary campaign against the 50% Council Tax discount for second home owners introduced by the Conservatives in the 90s and was the first to draw attention to and protest against the tax loophole which has allowed property investors and second homers avoid paying anything when it was first – perhaps inadvertently – created nearly a decade ago.

Mr George said, “Local people would be scandalised if they knew how their taxes were being spent. Over £100 million of taxpayers’ money has been handed out to thousands of Cornwall’s second home owners who don’t need and in my view don’t deserve these massive pay-outs. Most will have received up to £18,000 per home if they claimed each of the 4 Covid support payments since last March.

“As someone who in my day job leads a charity which works to deliver new secure affordable homes for local families I know that if this money were instead directed to our sector we could produce over 3,000 much needed affordable homes for locals.

“This is about social justice. It’s not the politics of envy. Local people are not fully aware that hundreds of millions of pounds of taxpayers money has been used to subsidise people who are wealthy enough to have a second home in Cornwall over the last decade through a variety of tax loopholes. On top of that a further £100 million has been doled out in covid aid in the last year.

“The Chancellor should use next week’s Budget to ask for this money back and to then redirect it for socially useful purposes, like addressing the desperate housing need of local families. He should also close these tax loopholes immediately.”

 

Notes


1. There are currently more than 23,000 properties in Cornwall registered as a second home or holiday let. There are likely to be many more which are not registered. These include the new wave of AirBnB properties which have sprouted up in recent years.

2. About 10,500 of these have opted to pay Business Rates rather than Council Tax. Many have switched from Council Tax to Business Rates since it became possible in 2012 to claim Small Business Rate Relief (SBRR) and potentially pay nothing. In order to qualify to switch a second home from Council Tax to Business Rate liability and then take advantage of the entitlement to full rate relief the owner must make their home available for holiday letting for at least 140 days (20 weeks) a year. They don’t have to actually let the property for that time. Just make it available for letting. They can still use the home as a second home for the rest of the time.

3. Mr George received the following information from Cornwall Council in response to his questions:

i) 8736 of the 10593 NDR (Non Domestic Rates) accounts where the VO (Valuation Office) description code is self-catering unit have some amount of SBRR. Of these 108 have something to pay – the rest have a zero bill. However as you are aware, Cornwall Council receives reimbursement for the cost of awarding SBRR (Small Business Rate Relief).


Date                

Date                   Total Accounts            SBRR Accounts            % SBRR of total

01.04.2018            32056                                26836                          83.78

01.04.2019            33114                                 27566                          83.24

01.04.2020           33835                                 28382                        83.88

08.02.2021           35539                                30192                          84.47

   
 
 
  • March lockdown £79,275,000.00 (7773 accounts)
  • Nov Lockdown £9,285,198.00.00 (6900 accounts)
  • Tier 3 Restrictions Payment £4,325,279.00 (6430 accounts)
  • January ’21 Lockdown Payment + Closed Business Lockdown Payment £40,050,521.00 (6617 accounts)
    TOTAL – £132,935,998.