Last year the Chancellor Mr. George Osborne announced that he
intended to place full VAT of 20% on Static Caravans from October
2012. Static Caravan mobile homes are currently subject to Value
Added Tax only on the removable contents, such as the furniture,
beds and white goods. The planned rise would have placed over
£6000 on the average new caravan and this would have inevitably
led to a drop in demand and ultimately jobs.
However, the caravan industry pulled together and came out in force
to lobby against this decision. It was made very clear to the
Government that the unplanned consequences of this rise would be
far reaching and would not only affect the caravan industry but all
the micro businesses that rely on tourists of the sale of caravans.
Electricians, Plumbers and site workers would all lose customers and
income. This is not to mention all the restaurants, fish & chip shops
and grocery stores that have a short season to make their money that will see them through the winter.
It was feared that the current Holiday Home owners would be put off
from buying caravans as second homes and would turn to bricks and
mortar, buying up the cheap local homes. This will ultimately cause
a rise in the value of these homes that were generally purchased by
local first time buyers thus leaving many young couples without a
home of their own.
Eventually the Government was persuaded by all the strong
arguments that the caravan industry and small businesses put
forward and a deal was negotiated between the British Holiday Home
Association, Inland Revenue and The Government to increase the
TAX to 5% and this rise tof come in on the 1st April 2013.
However, in these uneasy economic times, any rise is unwelcome. It
will still be a rise of &£;1500 per new caravan and an average of &£;750
for a pre-owned one.
With the deadline of the increase looming it would be advisable to
have your new static holiday home sited, connected and paid for
before the 1st April 2013.
