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Caravan Tax U-Turn is Good News for Us All

29th May 2012

There’s an old proverb that goes ‘it’s always darkest before the dawn’, and that has certainly proven to be the case in the caravan industry over the past couple of days. We’ve recently blogged about George Osborne’s proposed caravan tax, and it seemed as if the imposition of it was a grim inevitability.

Just yesterday, a report by KPMG on behalf the National Caravan Council and British Holiday and Home Parks Association claimed that 4,370 jobs were at risk from the proposals outlined in the budget, with most job losses coming in areas already hit hard by the recession such as East Yorkshire.

To pile further misery onto the caravan industry, the report also claimed that the decrease in manufacturing and job losses would result in £1billion worth in loss of sales. To say the outlook was bleak is an understatement.

What a pleasant surprise it was, then, to find out this morning that the Treasury has performed a u-turn on applying VAT to static caravans. Well, not quite a u-turn; static caravans will now have a tax of 5% levied on them instead of the rather scarier 20% proposed before, with the imposition date moved back to next April.

This is obviously fantastic news for everyone in the caravan industry, from manufacturers of static caravans to caravan dealers. Thousands of livelihoods have been assured with this move and the caravan industry possibly saved from disaster.

The reversal of the proposed tax is also good news for North Western Caravans on a personal level. We don’t sell static caravans, but the knock on effect on the British tourism industry from the caravan tax would have surely seen sales of touring caravans drop as well.  Now, thankfully, that shouldn’t be the case.