Middlesbrough South and East Cleveland Labour MP, Tom Blenkinsop, today (26th March 2012) revealed that hidden in the ‘very small print’ of the Chancellors tax announcements after the budget was ‘a bombshell’ for local people who rented static caravans as holiday or leisure homes.
In the 2012 budget it was announced in the detailed ‘Red Book’ that from the 1st October 2012 VAT (Value Added Tax) will be applied to static caravans, which could make your next holiday home 20% more expensive to buy. Previously, static caravans were in what the government has referred to as a ‘Tax Loophole’, meaning that they were 0% tax rated. The new budget will bring static caravans in line with touring caravans, meaning they will be taxed at the current VAT rate of 20%.
Tom said “This is a ticking time bomb for everyone in my constituency who prefer a quiet holiday near home rather than jetting off to Malaga or Benidorm. These are people who prefer to holiday at – for instance – the Hazelgrove Caravan park in Saltburn and who, through this, help the local economy and local shops. I suspect that it was this vital cash contribution to local seaside resorts that helped these caravans to be zero rated for VAT purposes. Now, at a stroke of the Chancellors pen, this has been set aside, meaning a big rental hike for ordinary families.
I also fear that some Caravan and Holiday Home owners might be tempted to milk this VAT rise by imposing rental rises which go beyond merely passing on the new VAT burden or attempt to push through these increases now, rather than waiting for the October implementation date. It is crucial that static caravan tenants look very carefully at the letters they get from caravan proprietors.”