It’s fair to say that all of us are feeling the pinch of the Government’s austerity measures at the moment – some of us worse than others. Every day it seems we are confronted with another sad story on the news about yet another well-established business going into administration or thousands of people losing their jobs.
This has certainly been the case for the caravan industry. In the past two years, caravan dealers as large as Discover Leisure Caravans have succumbed to the decrease in demand caused by price hikes and the average consumer having less money. Now, after Chancellor George Osborne’s recent Budget and his ‘war on tax loopholes’, the caravan industry has been hit by the news that VAT will be payable on static caravans.
Whilst this doesn’t directly affect the types of caravans on sale at North Western Caravans, it will undoubtedly have a negative effect on our industry both directly, through decreased sales and manufacturing, and indirectly, through the damage caused to the UK tourism industry.
It’s estimated that the imposition of VAT on static caravans, due to come into effect on 1 October, will lead to 1,000 job losses and could add to up anything from £6,000 to £30,000 onto the price of a new fixed caravan. The new tax will hit manufacturers of static caravans, 95% of which are made here in the UK, and holiday park owners particularly hard.
As well as our industry, this tax will also affect anyone looking into buying a caravan. Anyone who was looking into purchasing a static caravan but now feels priced out should consider used caravans. Whilst still subject to VAT, these mobile caravans offer much the same experience as their static cousins for a fraction of the price.
For those looking for the space offered by a static caravan, VAT rules state that any touring caravan over 7 metres in length or 2.55m in width is ‘zero-valued’. As an alternative to the static caravan, this offers a cost-effective holiday home with the same spatial benefits of a fixed caravan.