Business leaders dub motorhome and campervan tax 'poorly judged' and plead with Chancellor to look again in March Budget

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The Hull and Humber Chamber of Commerce has written to the Chancellor of the Exchequer calling for a rethink on the way some new motorhomes are taxed which has led to 700 per cent for newer models.

Since September 1, newly registered motorhomes and campervans are now classed in the same category of cars for road tax, increasing the duty payable by 705 per cent - from £265 to £2,135, due legislation aimed to encourage lower emissions.

The campervan and motorhome tax has been branded 'porrly judged' by business leaders. Credit: Gary Longbottom.

The campervan and motorhome tax has been branded 'porrly judged' by business leaders. Credit: Gary Longbottom.

Fears were raised by MPs and business leaders at the beginning of the week over the impact this would have on the economy, esecially around Hull where there are a number of motorhome manufacturers already reporting dropping sales.

And now the Hull and Humber Chamber - which represents more than 2,000 companies in the Humber region - has added its voice to the fray in writing to Sajid Javid.

Read more: Government digs in heels over 700 per cent rise in motorhome road tax

In the letter Chamber Chief Executive Dr Ian Kelly said: “Most new motorhomes are built on commercial vehicle chassis and are clearly not the same category of vehicle as private cars. We therefore don’t believe they should be taxed as such. In our view they should continue to be taxed under the Private Light Goods PLG/PHG category, as was previously the case.

Hull and Humber Chamber Chief Executive Dr Ian Kelly. Photo: Submitted

Hull and Humber Chamber Chief Executive Dr Ian Kelly. Photo: Submitted

“As you may know, many leading industry bodies and manufacturers have already raised their concerns on this matter. From the Chamber’s perspective the Humber is home to many of the UK’s best caravan and motorhome manufacturers, with major businesses and employers on both sides of the river.

Read more: Fears for Yorkshire tourism and motorhome manufacturing over 700 per cent rise in road tax​

“Ours and other business surveys are clearly documenting that manufacturers and retailers are facing tough times in the current economic environment and with the motorhome and caravan industry being not only a major local employer, but also a source of substantial tourism revenue for the UK, we feel that this poorly judged 700 per cent increase should be reconsidered urgently.

“We very much hope that you will look again at this issue and amend the legislation so our manufacturing industries are not undermined and a Fair Motorhome Tax system is implemented as soon as is practicable after your March Budget.”

On Tuesday, the Government said has said it is “convinced about the need to incentivise the reduction in our transport emissions” when questioned in the Commons on the topic.

Read more: Motorhome and campervan tax must be halted after 705% hike – The Yorkshire Post says

Labour MP for Hull East Karl Turner told Treasury minister Simon Clarke this would have a “disastrous” impact on the motorhome manufacturing industry, with the the National Caravan Council (NCC) already finding 80 per cent of manufacturers were expecting “significantly lower sales in the next 12 months” due to the changes.

And Hull West and Hessle MP, Labour’s Emma Hardy said: “The concern is it’s going to affect the local industry, around here we manufacture lots of motorhomes and campervans and there’s been a drop in sales."

A Treasury spokesperson said: “We want to incentivise drivers to make the greenest choices, which is why we’ve introduced a new, robust CO2 emissions test procedure. Motorhomes move into a different VED category as a result, but we recognise the concerns of the sector, and keep all taxes under review.”