A Tayside company has welcomed the Treasury’s decision to abandon plans to hike tax on motorhomes by 705%.
Errol-based Perthshire Caravans warned last year taxing motorhomes as cars than private or light good vehicles would have a “devastating” impact on its business.
Motorhomes are built using a light commercial chassis, with a commercial engine, as their base. Manufacturers then convert these vehicles into motorhomes.
They were taxed as private light or heavy good vehicles until September last year when they started being taxed as cars instead.
This meant the Vehicle Excise Duty (VED) paid on motorhomes increased from £265 to £2,315, while tax costs also rose for the first five years of the vehicle’s life.
But Chancellor Rishi Sunak announced in Wednesday’s Budget that they will start being taxed as commercial vehicles again from Thursday, saving owners thousands of pounds a year.
Perthshire Caravans director Claire McCormack said: “Perthshire Caravans is proud to have been part of this successful campaign and the movement that helped deliver the change.
“This campaign gathered support across the industry in a way like no other as the tax hike really was a raw deal for consumers, dealers and manufacturers.
“This now offers a welcome boost to our business and the industry as a whole, at a time when so many other factors such as Brexit and the coronavirus outbreak place uncertainty upon trade generally.
“This really is a massive victory. However, most of all, we are satisfied that this means a much fairer deal for our customers.”
The National Caravan Council also campaigned against the new tax on motorhomes.
NCC wins campaign battle for #fairmotorhometax. VED hike reversed in Budget as Chancellor confirms that the tax rise on new motorhomes will be reversed from 12 March 2020. NCC’s John Lally thanks Rishi Sunak and 85 MPs who supported campaign. https://t.co/8LlaSXeAQj pic.twitter.com/Flwt3Bkms5
— The NCC (@NCCLtd) March 11, 2020
