Chancellor reverses motorhome road tax rise in 2020 budget

Motorhomes 11-03-2020 | 12:01 HOUR

Amid the corona virus news this week, the Chancellor announced he will reverse the motorhome road tax on new models.

The so-called Vehicle Excise Duty (VED), or motorhome road tax, came into force on 1st September 2019 for newly registered motorhomes. It put a tax increase of up to 705% on new models. The tax rise hit motorhomes which had the new generation, more efficient and more environmentally friendly engines.

NCC campaign against the motorhome road tax rise

The National Caravan Council (NCC), the industry’s trade body, began a campaign against the motorhome road tax rise. The Council’s #fairmotorhometax campaign quickly gained backing. By March 2020, 85 cross-party MPs were backing the campaign, including Rishi Sunak before he became Chancellor.

John Lally, NCC Director General, said:

“Leisure vehicle manufacturing is a British success story. The steady growth the motorhome industry had seen up to the time of the tax hike was almost instantly halted. We are delighted that our new Chancellor has so quickly understood that motorhomes and campervans should not be taxed as cars, that he has shown concern about the threats to our industry and taken this action to preserve jobs.”

With the news about the VED, the tax on motorhomes will be the same as vans. Most motorhomes sit on a commercial vehicle chassis.

Motorhome manufacturers welcome the news

It is good news for new motorhome owners and manufacturers.

James Turner, Managing Director of Swift Group in Hull, said:

“This is an incredibly important result for our industry, it will without doubt resonate with our loyal customers, which in turn will give all businesses within the entire supply chain the opportunity and the confidence they need.”

Rob Quine, Managing Director of Erwin Hymer Group UK, based in Consett, said:

“Ours is a highly innovative, inventive and competitive industry, but these tax hikes threatened its stability. I would like to thank the NCC and our new MP, Richard Holden, for all they did.”

How the news affects UK motorhome sales remains to be seen. But, with coronavirus flight and travel restrictions in place, the changes to the motorhome road tax could encourage more people to holiday in the UK, and to buy motorhomes.