Caravan parks ‘at risk’ from VAT hike

Published on 08/04/2012 00:00

PLANS to introduce a “holiday tax” could cripple the tourism industry across the UK, a holiday park firm has warned.

South Lakeland Parks said imposing VAT at 20 per cent on the sale of static caravans could lead to people turning their backs on UK holidays in favour of seemingly more affordable alternatives overseas.

The proposals were announced in last month’s Budget by Chancellor George Osborne as part of the drive to close loopholes and remove anomalies from the way VAT is applied.

From 1 October, VAT will be extended to static holiday caravans to bring them into line with mobile caravans.

Nigel Wimpenny, managing director of the company, which operates nine parks throughout the Lake District and Lancashire, said: “At a time when we should be doing all we can to encourage more people to holiday at home and buy British, the reality is quite the opposite.

“Even on our most affordable brand new caravan, a 20 per cent price hike adds an extra £4,000 to the cost of purchase, which is substantial enough to make people reconsider buying a UK holiday home in favour of simply taking a few more European holidays.

“This will not only impact on the tourism spend in areas like the Lake District, it will bring the British manufacturers of holiday homes to their knees.

“It will lead to job losses in the industry and in those businesses that are indirectly supported by tourism spend such as cafes, pubs and restaurants, visitor attractions and shops.”

He said research from the British Holiday & Home Parks Association shows that 53,000 jobs are supported by the industry, often in rural areas.