Over 1000 jobs at risk due to caravan tax

March 29, 2012 2:46 PM

If you buy a touring caravan, VAT is paid at the standard rate of 20 per cent. If you buy a static caravan, VAT is zero rated. In his Budget last week, George Osborne decided to bring static caravans in line with touring caravans.

Simplifying the tax system is a good thing, but he has used simplification as an excuse to grab more of our cash by raising taxes, particularly after raising the standard VAT rate. Why can't politicians level these kinds of differences down instead of up all the time?

Around 95% of all static caravans manufactured in the UK are built in Hull and East Yorkshire. A report in the Yorkshire Post last week stated more than 1000 local jobs could be lost as a result of the proposed change. The Treasury freely admits this change could reduce sales by 30%. Willerby Caravans, one of the many local manufacturers, is already operating on a three and a half day working week.

Like many sectors of the economy, caravan manufacturing is struggling under the prevailing economic climate and companies are doing everything they can to stay afloat. 

Quoted in the Hull Daily Mail, Hull North MP, Diana Johnson, summed up what most people think.
"This decision could have a really big impact on jobs. We have already lost so many jobs in this area, we really can't afford to lose any more. The Government announced it out of the blue, without consultation and without thinking about the impact."

Graham Stuart, the MP for Beverley and Holderness, and David Davis have demanded a meeting with the government. Mr Stuart's constituency is  home to ABI Caravans. Mel Copper, chief executive of Beverley's ABI (UK), said:
"Looking at the effect it will have on us and our clients, and bearing in mind we make up about 25 per cent of the UK market, this will lead to about 1,000 job losses. The retail consumer is going to be asked to pay 15 per cent more, which in the current economic climate is a major worry."

Simplification should mean just that. Taxes should be transparent and easy to understand. This is a classic example of politicians and mandarins in Whitehall grabbing more of our cash without understanding the implications to local economies around the country. I bet if you had asked them before the Budget how many static caravans are manufactured in Hull and East Yorkshire, they wouldn't have been able to give you an answer.

If Osborne wants more cash, he could take up our suggestions such as freezing the international aid budget and scrapping HS2. He could also look at scaling back the hugely bureaucratic structures in Whitehall.

We in the Hull and East Riding TPA will do everything we can to oppose this tax grab, and will work with others to persuade the Chancellor to think again.If you buy a touring caravan, VAT is paid at the standard rate of 20 per cent. If you buy a static caravan, VAT is zero rated. In his Budget last week, George Osborne decided to bring static caravans in line with touring caravans.

Simplifying the tax system is a good thing, but he has used simplification as an excuse to grab more of our cash by raising taxes, particularly after raising the standard VAT rate. Why can't politicians level these kinds of differences down instead of up all the time?

Around 95% of all static caravans manufactured in the UK are built in Hull and East Yorkshire. A report in the Yorkshire Post last week stated more than 1000 local jobs could be lost as a result of the proposed change. The Treasury freely admits this change could reduce sales by 30%. Willerby Caravans, one of the many local manufacturers, is already operating on a three and a half day working week.

Like many sectors of the economy, caravan manufacturing is struggling under the prevailing economic climate and companies are doing everything they can to stay afloat. 

Quoted in the Hull Daily Mail, Hull North MP, Diana Johnson, summed up what most people think.
"This decision could have a really big impact on jobs. We have already lost so many jobs in this area, we really can't afford to lose any more. The Government announced it out of the blue, without consultation and without thinking about the impact."

Graham Stuart, the MP for Beverley and Holderness, and David Davis have demanded a meeting with the government. Mr Stuart's constituency is  home to ABI Caravans. Mel Copper, chief executive of Beverley's ABI (UK), said:
"Looking at the effect it will have on us and our clients, and bearing in mind we make up about 25 per cent of the UK market, this will lead to about 1,000 job losses. The retail consumer is going to be asked to pay 15 per cent more, which in the current economic climate is a major worry."

Simplification should mean just that. Taxes should be transparent and easy to understand. This is a classic example of politicians and mandarins in Whitehall grabbing more of our cash without understanding the implications to local economies around the country. I bet if you had asked them before the Budget how many static caravans are manufactured in Hull and East Yorkshire, they wouldn't have been able to give you an answer.

If Osborne wants more cash, he could take up our suggestions such as freezing the international aid budget and scrapping HS2. He could also look at scaling back the hugely bureaucratic structures in Whitehall.

We in the Hull and East Riding TPA will do everything we can to oppose this tax grab, and will work with others to persuade the Chancellor to think again.

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