The battle to persuade the government to drop or amend its proposal to add VAT to static holiday caravans returned to the House of Commons this week.
The Exchequer Secretary to the Treasury (Mr David Gauke MP) confirmed that the Government have proposed a new definition of a zero-rated caravan, based on whether it has been designed and constructed for residential purposes.
He added:
‘We are consulting on whether additional criteria should be added to ensure that the zero rate applies only to caravans intended for residential use. We will listen carefully and sympathetically to the arguments that are put to us and we have course extended the consultation period to 18 May.’
The Minister was then questioned by Greg Knight, the Member of Parliament for East Yorkshire:
‘I thank the Minister for agreeing to extend the period of consultation. During the consultation, however, will he not only reflect on the scope of VAT, but give some thought to the many thousands of people throughout the country who could lose their jobs if the proposals are implemented as originally announced? Will he give some thought to them before he decides whether to phase, delay, amend or withdraw these plans?’
Mr Gauke replied:
‘Of course, we will listen to the representations that are made, and my right hon. Friend has made representations to me on behalf of his constituents. We are seeking to have a fairer VAT system, but of course we want to listen to those concerns that are raised about the implementation of these matters.’
Greg said later that Ministers will continue to receive representations during the period of consultation and no final decision will be made until after this ends. The issue will then return to the Commons for a definitive vote in late May or June.