MPs to meet Chancellor about the Caravan Tax

April 12, 2012 3:19 PM

Ronald Reagan once famously said the nine most terrifying words in the English language are, "I'm from the government and I'm here to help." Perhaps George Osborne and Treasury civil servants thought adding 20 per cent VAT to hot pasties was going to help resolve an anomaly, but as Tim Newark has pointed out this change could have a devastating effect on the Cornish Pasty industry in Cornwall.

It's the same story in East Yorkshire. I wrote about the Caravan Tax  a couple of weeks ago. The Chancellor decided to end an anomaly that has existed since VAT was first introduced, and will from October start levying VAT on static caravans to bring them in line with touring caravans on which VAT is already paid.

Since I last wrote, local manufacturers have been in talks with MPs, and as a result Graham Stuart MP and David Davis MP are meeting the Chancellor next week. Mr Stuart said, "It is often very difficult to get a Government to change a position they have included in their Budget but the impact of the VAT increase on East Yorkshire could be so severe that we must get the Government to think again on this issue."

One of the local manufacturers, Swift Caravans, said introducing 20 per cent VAT would "drop the industry off a cliff."

The government consultation on these plans ends on 4 May. Until then all of us have a chance to make it clear what a devastating impact this change will have on the local economy of Hull and East Yorkshire.

George Osborne is using tax simplification as a means to raise taxes, but the truth is simplification does not mean taxes should rise. It means they should be transparent and easy to understand. This is a tax grab, and the Chancellor must look at the evidence and reverse his decision.

 Ronald Reagan once famously said the nine most terrifying words in the English language are, "I'm from the government and I'm here to help." Perhaps George Osborne and Treasury civil servants thought adding 20 per cent VAT to hot pasties was going to help resolve an anomaly, but as Tim Newark has pointed out this change could have a devastating effect on the Cornish Pasty industry in Cornwall.

It's the same story in East Yorkshire. I wrote about the Caravan Tax  a couple of weeks ago. The Chancellor decided to end an anomaly that has existed since VAT was first introduced, and will from October start levying VAT on static caravans to bring them in line with touring caravans on which VAT is already paid.

Since I last wrote, local manufacturers have been in talks with MPs, and as a result Graham Stuart MP and David Davis MP are meeting the Chancellor next week. Mr Stuart said, "It is often very difficult to get a Government to change a position they have included in their Budget but the impact of the VAT increase on East Yorkshire could be so severe that we must get the Government to think again on this issue."

One of the local manufacturers, Swift Caravans, said introducing 20 per cent VAT would "drop the industry off a cliff."

The government consultation on these plans ends on 4 May. Until then all of us have a chance to make it clear what a devastating impact this change will have on the local economy of Hull and East Yorkshire.

George Osborne is using tax simplification as a means to raise taxes, but the truth is simplification does not mean taxes should rise. It means they should be transparent and easy to understand. This is a tax grab, and the Chancellor must look at the evidence and reverse his decision.

 

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