Relief in Norfolk and Waveney after government cut back on caravan tax

The boss of a holiday park near Lowestoft has told of his relief after the government cut back a controversial tax rise on caravans.

David Westgate of Beach Farm Park, Pakefield, said the decision to charge 5pc VAT on the sale of static caravans instead of 20pc had helped prevent a 'disaster' in the tourism industry.

The managing director had backed a campaign by Waveney MP Peter Aldous to reduce the tax hike amid fears it would threaten the industry employing more than 30,000 people.

Speaking about yesterday's policy change, Mr Aldous and North Norfolk MP Norman Lamb welcomed the decision as 'good news' for the tourism sector in Norfolk and Waveney.

But while the government was praised for listening to people's concerns, business advisors warned it may lead to VAT increase later this year.

Mr Westgate said: 'It is a good result for us. We have been speaking to MP Peter Aldous and had put a lot of pressure on the authorities.

'The 20pc tax posed a major threat to caravan parks.

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'It would have been disastrous for the manufacturing industry in Hull and sellers in Great Yarmouth. All the traders that we deal with would have suffered in the Lowestoft area.

'It would have deterred people from buying caravans here, and many people would look to buy caravans abroad instead.

'It is just a major relief that they have seen some sense and taken notice of the concerns.

'The 5pc is not going to help but we can work with that.'

The controversial 20pc tax hike on the sale of static caravans was introduced in the government's Budget in March.

Mr Aldous and Conservative MPs raised concerns in April when they met with treasury minister David Gauke and wrote to chancellor George Osborne. They said the VAT rise could lead to 30pc reduction in sales and a severe loss of jobs in the manufacturing industry and holiday parks.

The MP for Waveney also signed an early day motion tabled by Graham Stuart arguing that static caravans contributed �334m to UK tourism and employed 33,000 people.

Last week, Mr Aldous presented a petition against the measure to the House of Commons signed by 316 residents and visitors to Waveney.

Mr Aldous said: 'I am very pleased that the Government has listened to myself and other MPs and significantly reduced the proposed level of VAT.

'I was extremely concerned that at a time when we are seeking to create new jobs locally that the proposed measures would harm local businesses and hit tourism.'

North Norfolk MP Norman Lamb said: 'I visited Kelling Heath, near Sheringham, which is one of the premier holiday parks, and they raised their concerns.

'Manufacturers and holiday parks were worried the price hike for purchase would put people off. It is good news for Norfolk as tourism is very important here.'

The VAT changes for static caravans will be delayed from October to April 2013.

But chartered accountants and business advisers Baker Tilly fear the retreat on tax hikes for caravans and pasties could lead to a VAT increase in the Autumn.

George Bull, senior tax partner at Baker Tilly, said: 'At a time when the economy needs as much support as it can get, I'm delighted to see that common sense has prevailed.

'However, this could mean that the UK faces a further VAT increase later this year.

'With income tax and National Insurance, VAT is one of the 'big three' revenue raisers for the UK Exchequer. With no upper limit on the standard rate of VAT, the autumn Budget may announce an increase to the current rate of 20pc, as recommended by the IMF.'

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