IMPOSING 20 per cent VAT on static caravan sales would be ‘disastrous’ for the Lincolnshire coast, according to the chairman of Conservative-controlled Lincolnshire County Council.
On Wednesday, Chancellor George Osborne confirmed many fears locally when he announced that VAT exemption on static caravan sales would be revoked as the Coalition government sweeps ‘anomalies’ from the tax system.
LCC chairman Neil Cooper and local caravan site owners have roundly condemned the decision imposing VAT from October 1.
Coun Cooper said in a letter to Prime Minister David Cameron: “The proposed 20 per cent VAT on caravans will lead to serious problems for the local tourism economy.
“I know the proposals are out to consultation but strongly feel that if implemented they would have a disastrous effect.”
He predicted ‘empty sites and many job losses locally’.
Other VAT-exempt quirks revoked include hot pasties, hairdressers’ chairs and protein shakes.
David Brailsford, general manager of five of the Springs chain of sites across Mablethorpe, Trusthorpe and Sutton on Sea, said: “Clearly this will slow us all down, we’ll all have to work harder to survive and it will have a knock-on effect on the whole caravan industry.
“Mablethorpe and Skegness have the second largest density of static caravans in England, and I think the suggestion that it will reduce sales on the east coast by 30 per cent is right.
“Having said that we were expecting it, it was only a matter of time, but it’s unfortunate timing when we’re in a downturn.”
A site owner, who didn’t wish to be named, said: “It’s a massive kick in the teeth for the industry.
“The Government are tightening their belt and want every penny they can get from us.”
The budget also announced a 20 per cent tax on gross profits from gaming machines.
President of amusement trade association BACTA, Derek Petrie, said ‘the end was nigh’ for many amusement arcades after previously warning that tax over 15 per cent would cause closures.
“The rates that the minister has proposed for his new tax on arcades are simply too high and will result in another cruel wave of closures on the seaside,” he said.
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