Delay tax threat to caravan businesses, urges CLA

25 May 2012

The CLA in the North is calling for a delay to the introduction of VAT on sales of static caravans in a bid to bolster the region's rural economy.

The Association is concerned that should measures announced in the 2012 Budget to introduce the tax in October go ahead, it will deliver a blow to the North's tourism industry.

CLA North Regional Director Dorothy Fairburn said: "Tourism plays a vital role in the North's economy and static caravans provide accommodation for thousands of visitors to the region. The Government is forecasting a 30 percent fall in demand for static caravans once the VAT increase is passed on, which would reduce the availability of this popular type of accommodation and have a serious knock-on effect for the local economy."

The CLA in the North is arguing that the measure should not be introduced until October next year, giving local businesses a vital additional 12 months to amend their financial plans.

Miss Fairburn added: "Trading conditions have been difficult over the last year due to the economy, especially given the cut backs in public sector employment on which the North is so reliant. A delay in introducing VAT would buy local businesses additional time to weather the financial storm and plan for the future." 

Bradley Burn Caravan Park is a family run business near Wolsingham in Weardale with 120 owner-occupied static holiday pitches as well as a farm shop and farm business, run in conjunction with the caravan park. It employs 16 people directly as well as supporting many local contractors and businesses. 

Park owner, Christopher Stephenson, said: "We expect to lose 30 percent of our turnover, so we will have to reduce overheads by at least that much to keep the business afloat, and more to maintain current profitability. Employment would have to be reduced accordingly. Caravan owner spend, which brings a range of benefits to the wider local economy, will be reduced as well.

"Despite these difficult financial times, we do have a development plan to grow and improve the quality of our park to meet customer expectations. We plan to upgrade our caravans and carry out more environmental work to build on our Gold award in the David Bellamy Conservation Award Scheme. But these plans may have to be abandoned if the VAT increase goes ahead."