Background

• The ASSC continues to collate evidence of the impact of the challenges facing our sector. In late November 2022, the ASSC surveyed over 1,100 businesses on short-term let planning and licensing regulations.
• The data shown in the below survey results will be used to inform ongoing discussions with the Scottish Government and other stakeholders.
• The results highlight the variation in costs in relation to obtaining a short term let license from planning permission to insurance and risk assessments for businesses across Scotland.
• Headlines show that 93% of businesses remain concerned about short-term let licencing with 66% saying they are considering leaving the sector.
• While this survey was undertaken prior to the announcement of the welcome six-month delay for existing operators, it demonstrates the work to be done in allaying the fears of those involved in Scotland’s vital tourism industry and securing a sustainable future for those involved.
• The Scottish Government must work in lockstep with industry and local councils to minimise the regulatory burden to support small business during these challenging times.
• The self-catering sector boosts the Scottish economy by £867m per annum, supporting 24,000 jobs. It provides a vital source of alternative accommodation for major events like the Edinburgh Festivals whose future viability remains at risk due to draconian short-term let regulations.

Headlines

Of the 1,148 businesses that responded to this survey:

• 87% had not yet have not yet applied for a licence despite the timeline for implementation
• Of those operators that have applied, 89% still being considered by local councils
• Those involved in the sector are downbeat about the future: 63% said they were pessimistic to very pessimistic.
• This is, in part, due to the costs associated with short-term let licensing and planning. Planning costs vary dramatically and are a significant cost for operators on top of all other costs to be able to apply for a licence.
• 66% were considering leaving the sector or were not sure, while 64% said they will leave due to short-term let regulation and its associated costs.
• Interestingly, of those considering leaving the sector, a massive 95% said that if they sell their property, it would not be available for affordable housing.
• 71% say that STL licensing significantly impacts on their business (93% are concerned to very concerned).
• In terms of other costs, 66% utility price increase significantly impacts in their business (94% are concerned to very concerned).
• Consequently, 40% are experiencing new and mild mental health problems with just under one-in-ten (7%) experiencing new and severe mental health problems.

After well over a year of negotiations with PPL / PRS,  we are pleased to announce some significant changes to the discretionary exemptions. The team who carried out the negotiations consisted of the ASSC alongside the Professional Association of Self-Caterers (PASC UK), The Tourism Alliance and UK Hospitality (England).

Any business with three or less properties of any size on a single site will now be exempt (previously it was a single property with three bedrooms or less). This will make a huge difference for vast swathes of the sector.

Fiona Campbell, CEO ASSC says: “We’re absolutely delighted to share such a positive outcome with our members which will make a considerable difference to many. Having worked on this for such a long time, we are pleased with the pragmatic and proportionate approach that has been taken and to have been able to work in collaboration with PPL PRS, the Tourism Alliance, Professional Association of Self-Caterers (PASC UK) and UK Hospitality (England).”

PPL PRS choose not to charge a royalty for the use of music (including TV and radio) in self-catering apartment(s) or holiday cottage(s) etc. where all of the following criteria is met:

• The accommodation consists of three self-catering units* or fewer, irrespective of the number of bedrooms in each.
• The premises is the sole holiday let, self-catering apartments, holiday cottage business operated or owned by the proprietors
• Facilities are only available to resident guests (and, in the case of holiday premises, the proprietors)

The fee structure is based upon the Small Residential Hotels and Guest House Tariff. We did not manage to get a dedicated Self-Catering Tariff, although we are still working on this.

We have example case studies of what charges might look like for larger business, which are considerably less than some of the charges previously levied. For example, an operator with 4 properties in a single site would be paying £61.77.

PRS Higher Rate Royalty:

If an operator has not applied for and obtained PRS for Music’s licence before musical performances commence, a higher (standard rate plus 50%) royalty rate will be charged and payable for the first year of the licence. After the first year of the licence, the standard royalty rate will be charged and payable.

We have negotiated an ‘amnesty’ for the first-year surcharge of 50%, if operators proactively contact PPL/PRS and pay before the end of March 2023. For this to apply you will need to contact PPL/PRS as described below and pay by 31 March 2023. If a non-exempt operator proactively contacts PRS PPL and applies and pays for a licence before 31 March 2023, PRS PPL have agreed to waive the 50% surcharge. Quote PPLPRSMAR23.  You will need to proactively contact PRS PPL for this to be applied.

PRS PPL can be contacted, and licences applied for via their website https://pplprs.co.uk or by phone on 08000 720 808.

Full details of the exemptions and FAQS can be found here

Guidance updated 18.01.23