NCC LOBBYPOINTS FOR ADJOURNMENT DEBATE

							LOBBY MESSAGES FOR ADJOURNMENT DEBATE

      Zero-rate VAT on sale of caravan holiday homes is not an anomaly – standard rate is an
       injustice:
           o Zero-rate VAT is not an anomaly because:
                   When VAT was first introduced in the 1973 it was Government’s intention
                      for caravan holiday homes to be zero rated because they had not been
                      taxed beforehand
                   Correspondence from The Treasury in 1989 confirmed that ‘zero rate relief
                      was justified’ because caravan holiday homes are closer to permanent
                      ‘second’ homes which are zero-rated - and continue to be so
                   zero-rate was applied to the structure of the caravan holiday home to align
                      it with second ‘permanent’ homes
                   ‘removable contents’ in the caravan holiday home have always been
                      standard-rated just as contents in second ‘permanent’ homes are standard
                      rated
           o Standard rate VAT is an injustice because:
                   caravan holiday homes cannot and should not be aligned with touring
                      caravans –caravan holiday homes are designed and constructed for long-
                      term second-home accommodation like holiday cottages and are ‘fixed’ in
                      one place; touring caravans are ‘mobile’, offer short-term holiday
                      accommodation in different locations and are not built or designed for
                      longer stays
                   the purchase of other second-homes (e.g. holiday cottages) are VAT exempt
                   caravan holiday homes provide a real second-home choice freeing up the
                      existing local housing stock as homes for local people rather than second
                      homes for visitors
                   it will penalise low income families and older people from purchasing an
                      affordable holiday home they can regularly use

      This proposed measure will result in a significant loss of jobs across the industry and the
       effect of job losses has virtually been ignored:
           o Initial industry research suggests a potential 4,340 jobs could be lost on holiday
               parks across the UK alone – some manufacturers are already on a 3 day week
           o Further job cuts could include 1,500 jobs at suppliers, 80 amongst holiday caravan
               distributors and 1,400 in holiday home manufacturing
           o Job losses are likely to be experienced most in areas least able to accommodate such
               loss – areas of existing employment detriment – Humberside and East Yorkshire,
           rural and coastal towns – where finding new or alternative employment will at best
           be hard and at worst impossible
       o   The additional social costs to Government of redundancy payments, job seeker
           allowances and retraining are significantly higher than the VAT revenue HMRC
           anticipates would be achieved in year one. Lost tax revenues as a consequence of
           VAT increase not mentioned in the impact statement

   The impact on current planned and future unplanned investment throughout the caravan
    holiday home industry will be devastating:
        o The short notice (less than six months before the proposed implementation is due to
            take place) is unfair and will wreak havoc on businesses’ economic forecasting
        o Businesses are unable to finalise capital investment plans resulting in:
                 Delay, deferral or cancellation of business improvement plans -
                    redevelopment and expansion programmes as well as planned new
                    developments, and new leisure facilities such as sports complexes or
                    swimming pools
                 Hire fleet upgrades on hold limiting consumer in their future choice of hired
                    holiday accommodation
                 Less consumer expenditure on new caravan holiday homes will lead to
                    manufacturing becoming unsustainable and putting some holiday parks at
                    risk
                 Reduction is investment in apprenticeship and employee training
                    programmes

   Significant contribution to tourism spend has been ignored
        o Caravan holidays account for £1.8 billion per annum spend on UK holidays
        o Over 11 million holidays per annum are spent in caravans generating 55 million bed
             nights
        o Over 200,000 people have invested in caravan holiday home ownership choosing to
             ‘holiday at home’ keeping their precious holiday spend in Britain
        o Many of these owners rent out their homes providing additional accommodation
             stock in peak season, again helping to keep the holiday pound in the UK
        o Caravan holiday homes:
                  Encourage long term ‘staycationing’ – which Government promotes
                  are popular because they allow people to revisit places they love
                  offer an affordable ‘lifestyle’
                  are a long term investment in the British tourism economy