THEY nestle between trees and lochs, overlooking some of Scotland's top beauty spots.
Yet behind the tranquillity of timeshare holiday apartments lies a legal loophole that is costing the country about £2 million a year in lost taxes.
The Sunday Herald has discovered that Scotland's 18 timeshare developments, where people usually purchase "ownership" for a week or two each year, are classed as small businesses for the purposes of calculating council rates.
This means non-domestic rates are paid rather than council tax, and in most cases apartments qualify for 100% rates relief under the Scottish Government's small business bonus scheme.
This is despite the fact that timeshares are actually often run by large companies, and are, in most cases, owned by the firm that arranges them.
The biggest beneficiaries include Gleneagles, whose 52 Glenmor Village holiday homes in the grounds of the Perthshire hotel have avoided around £750,000 in tax since the bonus scheme was introduced in 2008.
Other examples include 87 Cameron House lodges on the shores of Loch Lomond, which have saved around £800,000; and Hilton Hotels & Resorts' 183 lodges at Craigendarroch, Coylumbridge and Dunkeld, which have been saved a total of around £1.5m by the loophole over the past four years.
A letter leaked to the Sunday Herald from Scottish Finance Secretary John Swinney to the former MSP Jim Mather, dated February 2010, shows that the Government has been aware of the issue for some time. Swinney wrote that the small business bonus scheme is aimed at "genuinely small businesses" but said there was a need to "strike a balance" between the affordability of the scheme and rules that would exclude certain types of small business.
John Christlieb, owner of the Melfort Pier and Harbour holiday apartments near Oban and the subject of Swinney's letter, claims that the loophole discriminates against businesses such as his.
His apartments are aggregated for rates purposes, which means they don't qualify for relief – unlike the nearby Melfort Club development of 32 timeshares. By law, it is the occupier who is responsible for paying rates but in the case of timeshares, they are each treated separately.
Christlieb said: "The Melfort Club can by no stretch of the imagination be called a small business. And you certainly can't call Gleneagles or Cameron House a small business."
It follows a story in last week's paper that showed that Rosneath Caravan Park, near Helensburgh, had its rates valuation cut by about £80,000 after it discovered that the loophole applied to caravan owners too.
Colin Borland, the head of external affairs in Scotland for the Federation of Small Businesses (FSB), said: "The small business bonus has been a lifeline to thousands of Scottish small firms in our hardest pressed areas. It is precisely to stop big businesses claiming rates relief on all their premises that eligibility for the scheme is calculated using the aggregate value of a business's property.
"Later this year, the Scottish Government plans to launch a review into the operation of the business rates system. This presents the ideal opportunity to tackle these anomalies."
A Scottish Government spokeswoman said: "It is the responsibility of local authorities to decide if individual businesses are eligible. We will carry out a review of the operation of business rates shortly in advance of the next revaluation in 2015."
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