In today’s budget statement, UK Chancellor George Osborne, moved away from his previously announced intention to levy 20% tax on sales of static caravans. There had previously been no tax payable on such sales.
Dave Thompson, MSP for Skye, Lochaber and Badenoch, had previously raised concerns about the impact of such a move on first time home buyers in in the Highlands and Islands. With house prices remaining beyond the reach of most first time buyers, static caravans are often the first rung of the ladder.
Adding 20% to their price in the proposed new tax would have discriminated heavily against just the sort of people areas like the Highlands and Islands really need to be able to stay here.
Earlier this month, Mr Thompson wrote to Danny Alexander, Chief Secretary to the Treasury, accusing the UK Government of discriminating against first time buyers and hindering tourism by imposing a static caravan tax.
It’s no surprise then that Mr Thompson has quickly welcomed the UK Government’s retreat from levying this charge. It is not a complete retreat, of course. There is face saving to be done and money to be raised from somewhere – so there will be a 5% tax on the sales of static caravans.
Mr Thompson says: ‘The UK Government has finally awoken to the public outcry against the shambolic Budget and done a partial U-turn on levying 20% VAT on static caravans. Instead of 20% VAT, there will still be a 5% VAT, which is still more than I would like to see. This partial U-turn indicates just how out of touch and lost the UK Government is.’
Michael Russell, MSP for Argyll and Bute, has also welcomed the Westminster government’s change of mind on this matter, saying: ‘Of significant importance in Argyll and Bute is that the proposed Caravan Tax of 20% on sales of mobile homes has been reduced to a proposed 5%.
‘I have been campaigning hard on this issue and I am glad that the UK Government has finally seen sense. It would have been disastrous for the holiday parks in Argyll and Bute.
‘The caravan and holiday parks bring a lot of business to Argyll and the introduction of this tax would have been extremely damaging.
‘It beggars belief that The Lib Dem MP for this area was supporting the Westminster Coalition Governments destructive tax on tourism.’