Pie Tax horror announced in Budget

[quisquose]

Stamp duty on a swish second home in Cornwall - 1%

VAT on a caravan in Skeggy - 5%

 

Stamp duty on a £200,000 holiday home - £2k

VAT on a £30,000 caravan - £1.5k

 

That doesn't look very fair does it.

 

No, I agree, it doesn't look very fair, not if you take "sides" and spin it accordingly.

 

Somebody could take the opposite side and spin it the other way though.

 

VAT on a £30,000 caravan (which only a rich person could afford) - £1.5k

VAT on 5 years of £1k self-catering holidays for the family in Skeggy (which the average family could afford) - £2k

 

So you prove my point, once you have decided which "side" is right and which "side" is wrong, it is easy to obtain a priori evidence.

 

Party politics is the problem.

[xenia]

You mean the Tories don't half know how to look after the super rich at the expense of everyone else. Pandering to them and lowering the higher rate of tax whilst they are cutting essential services is absolutely disgusting. It is totally immoral.

 

 

The super rich spend thier money and create employment in this country. To tax them as the old LABOUR party did drives them out of the country and we all lose.

 

We should seek to encourage the wealthy to base themselves here, we should make UK a tax friendly domicile for the rest of the world.

 

So called "essential" services are over staffed, over funded, ill used, and unnecessary.

[I1L2T3]

No, I agree, it doesn't look very fair, not if you take "sides" and spin it accordingly.

 

Somebody could take the opposite side and spin it the other way though.

 

VAT on a £30,000 caravan (which only a rich person could afford) - £1.5k

VAT on 5 years of £1k self-catering holidays for the family in Skeggy (which the average family could afford) - £2k

 

So you prove my point, once you have decided which "side" is right and which "side" is wrong, it is easy to obtain a priori evidence.

 

Party politics is the problem.

 

The figures only tell a part of the story unfortunately.

 

The caravans are not generally bought by rich people. Most people who buy them are just ordinary folk who work hard for that little bit of luxury in their lives.

 

Consider that we have a solid caravan manufacturing business in the UK employing several thousand people. An increase in the end price of caravans could dampen demand and lead to business failures and job losses.

 

Consider that many holiday parks use a business model that mixes private ownership with rental. An increase in the end price of caravans could reduce take up of private ownership and damage the business model. Likewise an increase in the purchase price of caravans for rental will affect margins. Parks might fail and there could be job losses.

 

As the VAT has to be fed through into the end price of caravans the cost of this cannot be absorbed by park owners and raises the price of holidays. This might lead to less people going on holiday and impact the economy of resorts. At the very least people might have less money to spend while on holidays. The impact on toursim could lead to job losses.

 

Consider that the government are trying to encourage people to holiday at home. Increasing taxes on a fragile tourist industry is not very sensible.

 

All of my arguments above were pretty much stated by the Tory MP for Cleethorpes on the Politics Show recently. He knows the importance of this given he represents a low income area heavily dependent on relatively low end tourism. Park owners also had very similar arguments.

 

It's an unfair, stupid and unjustified tax. Only a fool would support it.

[HeadingNorth]

The caravans are not generally bought by rich people. Most people who buy them are just ordinary folk who work hard for that little bit of luxury in their lives.

 

VAT is supposed to apply specifically to luxuries. What was the argument against it applying to caravans, then?

[I1L2T3]

VAT is supposed to apply specifically to luxuries. What was the argument against it applying to caravans, then?

 

The argument is as detailed above. Support for fragile tourist and manufacturing industry. There are always special cases.

[quisquose]

VAT is supposed to apply specifically to luxuries. What was the argument against it applying to caravans, then?

 

Exactly, and I fail to grasp any logic in his arguments. This clearly makes me a "fool" in his opinion.

 

We pay 20% VAT on a new car, which for the vast majority of people is less of a luxury than a caravan ever is.

 

I don't know if he is motivated by love of caravans or party politics, but I'm not convinced by his arguments so far.

 

Writing as somebody who does not take "sides" when it comes to political parties, in fact I see party politics as a cancer on the political process, I just find this story very infuriating.

 

The decision to align caravans with any other luxury item, such as a car, and to remove the loophole that gave them special status, just seemed a sensible simplification. I would expect caravan manufacturers/retailers to complain and lobby, but to see the arguments polarised into an us v them, left v right, mirror v sun, excuse to bash/defend the government just indicates what a mess our political system has become.

 

[HeadingNorth]

The argument is as detailed above.

 

The argument above says that caravans are a luxury, which is an argument in favour of putting VAT on them.

[HeadingNorth]

The decision to align caravans with any other luxury item, such as a car, and to remove the loophole that gave them special status, just seemed a sensible simplification. I would expect caravan manufacturers/retailers to complain and lobby, but to see the arguments polarised into an us v them, left v right, mirror v sun, excuse to bash/defend the government just indicates what a mess our political system has become.

 

The same applies to the pasty argument - even more so, I would suggest. If VAT were applied to all hot foods sold for takeaway, and someone suggested that Gregg's pasties should be made exempt but that all other foods should still have it applied, they would be howled down as a laughingstock. It's palpable nonsense.

[I1L2T3]

VAT is supposed to apply specifically to luxuries. What was the argument against it applying to caravans, then?

 

VAT is not just a tax on luxuries. It's a tax on goods and services, e.g. Getting a roof repair.

 

Yes caravans can be considered a luxury but the VAT system is also flexible enough to cope with special economic cases. Because of the potential impact of the tax on tourism and manufacturing it is a special case. Estimates of job losses were 7-8000

 

You really should listen to what Martin Vickers, Tory MP for Cleethorpes, has been saying. He explains it far better than me. If you google 'Martin Vickers caravan' you will find a few articles. Read at your leisure

[Mecky]

The super rich spend thier money and create employment in this country. To tax them as the old LABOUR party did drives them out of the country and we all lose.

 

We should seek to encourage the wealthy to base themselves here, we should make UK a tax friendly domicile for the rest of the world.

 

So called "essential" services are over staffed, over funded, ill used, and unnecessary.

 

Yeah, well they ought to pull their finger out then.

 

How many people have left because of high taxes? Virtually none. It's just an empty threat and everyone knows it. Let them leave the UK, there are millions of people who would step into their place faster than you say, "Boo Hoo."