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Say NO! to VAT on Caravan Holiday Homes
 
Friday, 24 Nov 2017

Opposing VAT on Caravan Holiday Homes


Joint industry consultation response to HMRC and KPMG Economic Impact Study of the proposed change in VAT legislation

To view the industry consultation response opposing VAT on the sale of caravan holiday homes see below

VAT Addressing borderline anomalies Holiday Caravans - Industry response

The response focuses on the adverse and impractical consequences of the consultation as summarised:

  • the justification given for the proposal to apply VAT at the standard rate to holiday caravans is incorrect; the intention of the purchase of a holiday caravan is the same as for the purchase of a second home
  • the legislative proposals are unworkable. No proposal has been presented which avoids creating new anomalies, loopholes and enforcement difficulties, open to substantial legal challenge on EU VAT law principles
  • the Summary of Impacts does not recognise the true fiscal, economic and social costs of the proposal.

To view the KPMG economic impact study of the proposed change in VAT legislation see below

KPMG Economic Impact Study

Key findings show the proposal would mean:

  • a reduction in employment in the region of 4,370 FTE jobs, with job losses focussed on regions with already high unemployment (Humberside) and marginal rural and coastal economies (the overwhelming majority of which are also in areas of multiple deprivation and high unemployment). Moreover, the trade associations’ projections suggest these losses could be considerably greater
  • business failures across manufacturing, suppliers and holiday parks, the “shock effect” of which it has not been possible to model and may result in even greater impacts
  • a reduction in the industry’s Gross Value Added GVA contribution of £856m during the period 2012-2017
  • a fiscal cost to the Exchequer which may be greater than the VAT collected as a result
  • taking the British holiday caravan manufacturing industry back to production levels below the low point of the 2008/09 credit crunch, with at least 5 years needed for the market to recover towards the already-low 2011 levels; and
  • other social, environmental and economic impacts, including increasing the balance of trade deficit, which it has not been possible to model but which are explained in the report.

We must continue the momentum in the political lobby and urge our members to forward these two documents onto your local MPs to support the opposition campaign.

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