Static caravan tax will 'damage' tourism in Wales, MP says

A caravan tax would have a damaging impact on tourism in Wales, it has been claimed.

Simon Hart, Conservative MP for Camarthenshire West and South Pembrokeshire, said the UK government had "got it wrong" over plans to charge VAT on static caravan sales.

The consultation ends on Friday with Welsh park owners claiming it could cost the industry £16m.

The Prime Minister has insisted the tax is a fair one.

Static caravans have been exempt from the tax since the 1970s, but the Chancellor unveiled the new proposals in last month's Budget.

Trade body the National Caravan Council claims the tax rise would lead to 4,340 job losses at holiday parks across the UK, with a further 1,446 jobs lost in the manufacturing sector and 1,500 at suppliers.

Around 70 MPs have signed a motion to oppose the plans.

Mr Hart said: "It looks good on a piece of paper if you're sitting in the Treasury but if you're trying to operate in the real world, out there trying to run a business, I think this will have a significant effect and made worse by the speed by which they are intending to bring it in.

"A this time during the recession it doesn't seem the right thing to do."

Sleepless nights

The sale of caravan holiday homes have been exempt from VAT since 1973 but the Chancellor George Osborne had earmarked the tax to be reintroduced from October 1 2012.

James McAllister, owner of Brynteg Holiday Park, Snowdonia, said the tax plan has given him sleepless nights.

"We only have one choice, as I see it. To sell them at what we sold them for before and then we, as a business, have to take the loss.

"And that's a massive percentage loss for us. It means we've got to cut back hard if we are to survive as a business."

Gareth Townsend, owner of Lloyds' Caravans in Abergele, Conwy, felt customers will be put off from buying caravans.

"It's going to be a massive, massive shock to the whole industry within north Wales," he added.

"People who rely on the seasonal trade; surely there's going to be a decline of people coming down."

Visit Wales says holiday parks in Wales provide a £727m annual turnover.

'Challenging'

Chris Buckley says the luxury end of the caravan market would suffer.

"The indication is that there is likely to be a 30% drop in sales then obviously our manufacturing is going to drop by 30% and employing a large number of people in the Porthmadog and north Wales that's going to have an impact on employment," he said.

Ben Jones, from Colliers International, said: "Our estimates suggest that the average caravan holiday home park could lose as much as £900 per pitch, or 20%, of their profit as a result of the proposals.

"When you multiply this across the 18,396 pitches on 160 parks across Wales alone you are talking about a net cost of £16,556,400 to an industry which is just beginning to emerge from the most challenging downturn in its history."

First Minister Carwyn Jones has written to Mr Osborne to explain the negative impact a caravan tax would have on the tourism economy.