Caravan new tax ‘blunder’

Shadow Chancellor Ed Balls , visits Scarborough to talk to at the Federation of Small Businesses annual conference, at the Spa. Picture by Andrew Higgins 121270b 23/03/12
Shadow Chancellor Ed Balls , visits Scarborough to talk to at the Federation of Small Businesses annual conference, at the Spa. Picture by Andrew Higgins 121270b 23/03/12

THE Government has been blasted “out of touch” over plans to introduce VAT on caravans and motor homes.

Speaking to the Evening News yesterday shadow chancellor Ed Balls said the move is a “swingeing blow” to families and businesses on the East Coast.

His words came after Wednesday’s budget announcement which revealed as of October 1 this year previously un-taxed goods, including static caravans, will now be hit with the standard 20 per cent rate of VAT.

Mr Balls said: “It’s one thing to do things to help small businesses but this is an own goal the Government shouldn’t be making. They have kicked the ball in their own net.

“This is a very important industry for East Yorkshire. It will be a hard hit on manufacturers and a devastating blow on the mobile home industry.

“Whether or not it is a right move, just to announce it out of the blue the way he did is irresponsible.

“They have clobbered the industry.

“A decision like this just shows how out of touch Chancellor George Osborne is.

“I wouldn’t be surprised if Mr Osborne has never even been in a caravan, let alone know people who holiday in them.”

Mr Balls said Scarborough and the East Coast is popular destination for caravan holidays.

According to HM Revenue and Customs a caravan that is “designed and constructed for continuous year-round occupation” will still be zero-rated, and exempt from the VAT but all other static caravans will be taxed at the standard rate.