A campaign to reverse a “poorly judged” and “draconian” motorhome tax imposed in September has won an immediate U-turn in Rishi Sunak’s first Budget.
The huge hike, up more than 700 per cent in certain cases, came about through a Treasury-imposed classification change to the vehicles.
It was said to have been a contributory factor to a huge downturn in a Humber-centric industry, with redundancies made by companies in East Yorkshire and North East Lincolnshire.
Recent Brexit uncertainty and the “demonisation of diesel” had already delivered a blow, with the vehicle excise duty rocket making it a “perfect storm”.
How that now eases with the immediate coronavirus impact on travel remains to be seen, though “green shoots” have been seen at a recent show.
As of midnight on Thursday new vehicles registered will be treated as the vans they are based on, rather than alongside Bentleys and Range Rovers as had been the case - despite the average motorhome covering just 3,000 miles a year.
Managing director of Grimsby’s Auto-Trail, Dave Thomas, said: “In essence it looks like everything is going back to as it was under the previous taxation regime which is good news for customers, This news today can only help us.”
Across the river in Cottingham, is Swift Group. The company recently closed a plant in Sheffield, consolidating in East Yorkshire.
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Managing director James Turner said: “This is an incredibly important result for our industry, it will without doubt resonate with our loyal customers, which in turn will give all businesses within the entire supply chain the opportunity and the confidence they need.
“Our gratitude extends to all those involved for their support, with special thanks to the NCC and our local MP David Davis.”
The National Caravan Council mobilised a year ago when the rise was first mooted. Director General, John Lally, said: “Leisure vehicle manufacturing is a British success story. The steady growth the motorhome industry had seen up to the time of the tax hike was almost instantly halted. We are delighted that our new Chancellor has so quickly understood that motorhomes and campervans should not be taxed as cars, that he has shown concern about the threats to our industry and taken this action to preserve jobs.
“Motorhomes will now return to being taxed as vans, which is logical as the vast majority are based on a commercial vehicle chassis. This is an amazing result for us, for this vibrant manufacturing industry and for the many thousands who take motorhoming holidays – the vast majority in the 海角视频 – each year.
“We have had extraordinary support from parliamentarians – too many to mention them all - but in particular Richard Holden MP, Sir David Amess MP, Emma Hardy MP, Karl Turner MP and David Davis MP. Rishi Sunak MP – prior to becoming Chancellor - had also indicated support.”
A statement from the Treasury on ‘Vehicle Excise Duty: Change classification of new motorhomes’ confirmed the measure will treat motorhomes as private and light goods vehicles (PLGs) for VED purposes from 12am, 12 March 2020 to the 1 April 2021. Thereafter, new motorhomes will be registered as vans and will be entitled to pay van VED rates instead of car VED rates.
Hull and Humber Chamber of Commerce joined more than 80 MPs and the industry trade body in campaigning. External affairs manager David Hooper said: “The Chamber wrote to Sajid Javid when he was Chancellor and along with the local MPs has lobbied against this 705 per cent rise in motorhome tax for new purchases. We are very pleased to see they listened to our appeals on that, and announced a flat rate of £265, rising to £270.
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“A 705 per cent increase was draconian. It was to encourage greener choices, but those green choices simply do not exist or are just being introduced, but are not there yet.
“It is a great relief for the motorhome and caravan manufacturers in the Humber, and we’re delighted to have been able to influence the Chancellor.”
Jackie Hall, tax partner at RSM said the reverse of the motorhome tax will save more jobs in the region.
She said: "The decision by the Chancellor to reverse the 700 per cent increase in road tax for motorhomes is fantastic news. The tax will now revert back to £265 per year from the current £2,135 on new motorhomes. The hard lobbying by MPs and the National Caravan Council has paid off for what was a policy conceived in isolation and with no thought for any repercussions.
"Jobs directly linked to the motorhome manufacturing industry in Yorkshire and the Humber will be saved and there will, in turn, be positive benefits for suppliers and tourism."