UK Budget To Reverse Motorhome Tax Hike

A full reverse maneuver for VED
A full reverse maneuver for VED

Friday, 13, Mar 2020 10:29

By William Coleman

This week has been a bit of a crazy one following the Budget reform and has brought some amazing news for the touring industry as the Vehicle Excise Duty on new motorhomes sees a dramatic turnaround.

As I am sure everyone in the caravan and motorhomes world is aware, the VED on new motorhomes was set to increase up to 705%. Something that could have seen a potential collapse of sales and new people to the industry. Not to mention the loss of jobs and possible closure of companies due to people not wanting to buy new motorhomes.

This is all now set to change thanks to the new Budget review that was announced a couple of days ago. This news has been very much welcomed by dealers and manufacturers across the UK. The managing director of a leading Shropshire leisure business as "fantastic news for the industry and motorhome sales".

As of the 12th of March 2020 the annual VED for most, not all, new motorhomes will be set at a flat rate of £265. This number will increase to £270 from April 1st 2020. Hopefully the £5 jump won't break the bank too much.

When the the new VED was announced late last year it saw quite a lot of backlash and prompted the #fairmotorhometax campaign by the National Caravan Council (NCC), the trade association for the leisure vehicle industry, which was backed by 85 cross-party MPs.

Following Chancellor Rishi Sunak's Budget statement, the NCC announced that its battle for Fair Motorhome Tax was won. Delighted NCC Director General John Lally thanked MPs, members and the industry for their support.

Mark Bebb, managing director of Shrewsbury-headquartered Salop Leisure, an award-winning caravan and motorhome dealership, said: "The Chancellor's decision to reverse this extremely unfair tax is fantastic news for future motorhome sales and the leisure industry in general.

"Our thanks and congratulations go to the NCC and partners for working so tirelessly to reverse the huge tax rise which was bad news for British manufacturing jobs and potentially damaging for UK tourism.

"The industry can now look forward to a return of the strong demand for motorhomes which we as a business experienced last year."

Mr Lally described leisure vehicle manufacturing as a British success story. "The steady growth the motorhome industry had seen up to the time of the tax hike was almost instantly halted," he said.

"We are delighted that our new Chancellor has so quickly understood that motorhomes and campervans should not be taxed as cars, that he has shown concern about the threats to our industry and taken this action to preserve jobs.

"Motorhomes will now return to being taxed as vans, which is logical as the vast majority are based on a commercial vehicle chassis. This is an amazing result for us, for this vibrant manufacturing industry and for the many thousands who take motorhoming holidays - the vast majority in the UK - each year."

At this time I can just picture in my mind dealers and manufacturers taking a seat and having a quiet moment to reflect on this enormous win and taking a sigh of relief.

For a while I was totally unsure how the industry would react, and more importantly how the consumers would react to such a gigantic hike in price.

For now though it seems that all is right with the world and things have gone back to the way they used to be. New vans can sell to new owners and sites can fill up with sparkling vans direct from the forecourt.

Is this the end of the chapter? Only time will tell. It is not like the Government to leave money on the table, but in light of current events the UK leisure industry might just be one of the saving graces that we have.

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