Holiday Cottage Owners Welcome Budget Decision

Cherry Clough Farm near Denshaw (picture: www.cherryclough.co.uk)

The decision by Chancellor George Osborne to reverse the planned scrapping of tax breaks for holiday cottage owners has been welcomed in Saddleworth. He also announced various measures to help small businesses in areas such as ours, in a Budget speech dominated by his confirmation of a rise in VAT to 20%, along with cuts to benefits and other Government spending.

Of particular interest to many local businesses will be Mr Osborne’s announcement on holiday cottages. The last Government’s proposal to do away with tax breaks for owners of those businesses won’t now be implemented.

The idea was initially put forward because the practice of buying cottages to let out to holidaymakers has been blamed for driving up house prices in many rural villages, making it harder for local people to afford property in their home areas. However, the new Government believes abolishing the tax breaks would do too much to harm small businesses.

Netti Hall, who runs a holiday cottage and a B&B at Cherry Clough Farm above Denshaw, said she was “very pleased” at the Chancellor’s decision. She said she and her husband probably would have sold the holiday cottage to focus on running the B&B and their farm had the tax breaks not been retained, adding that it “wouldn’t have been worth the hassle” of maintaining the cottage if the tax relief had been scrapped.

Mrs Hall went on to say that the decision would be welcomed by farmers, adding that it was important for farm owners to find new ways of making money, such as through holiday lets. She said: “Unless farms like ourselves diversify we might have to stop farming, because basically there’s no money in it.” She added that she believed ministers had been surprised by the strength of opposition to the original proposal, which was announced a year ago.

In a written statement accompanying the Budget speech, the Treasury said that consultations will take place over the summer about a different plan to deal with the issues around holiday cottages. It added that the decision to keep the tax breaks will help 4,800 small businesses across the north west.

Other measures announced today aimed at boosting the private sector include exempting new businesses from paying up to £5,000 of employer National Insurance Contributions for the next three years. According to the Treasury’s own figures, up to 69,000 businesses in the north west could benefit.

There’ll also be an extension to the Enterprise Finance Guarantee scheme, which offers loans to small businesses. That announcement in particular was welcomed by Gavin Wheeldon, chief executive of Delph-based Applied Language Solutions.

He added: “It will be interesting to see what the promised additional measures to increase access to finance for smaller businesses will actually look like in the coming months. Hopefully the application process will be clear to navigate and won’t distract too much from day to day trading, which has been a real issue for businesses over the past couple of years.”

Meanwhile, Mr Osborne also revealed that the Government was still committed to upgrading the trans-Pennine railway. He gave the Commons a list of regional transport projects which will be protected in the interests of promoting economic growth in areas other than the south of England. That list included “improvements to the rail line between Liverpool and Leeds” as well as the Metrolink expansion.

There’s detailed coverage of the Budget all over the Internet today. But some of the best is at the BBC here and the Guardian here. There’s also an analysis for the Greater Manchester area by the MEN’s David Ottewell here. The Treasury’s own summary of the impact on the north west is available here.

Author: Jude Gidney - Editor

If you would like to share an interesting story, achievement, photo or something you just want to happily shout about please send it in an email to hello@saddleworthlife.com We'd ❤ to hear from you!!