Chancellor Rishi Sunak announced in his Budget of 11th March 2020 that the tax payable on first registration of a new motorhome or campervan will revert to £265 a year, potentially saving £000s for motorhome buyers and a huge boost to jobs in the industry
Motorhomes are built using a light commercial chassis, with a commercial engine, as their base. Manufacturers then convert these vehicles into motorhomes and campervans - and for many years motorhomes have been taxed as private light goods commercial vehicles (PLG- 3,500 kg and below), or private heavy goods commercial vehicles (PHG – over 3,500kg).
However as a result of a technicality under new EU regulation which came into force in 1st September 2019 new motorhomes and campervans were to be classed in the same category of cars. This meant increasing the duty payable by 705 per cent - from £265 to £2,135, after being caught in legislation aimed to encourage lower emissions. while tax costs also rose for the first five years of the vehicle’s life.
It was claimed the rise would have a “disastrous” impact on the motorhome manufacturing industry - much of which is based in Yorkshire - with the the National Caravan Council (NCC) finding 80 per cent of manufacturers were expecting “significantly lower sales in the next 12 months” due to the changes.
However in a huge victory for the industry, Chancellor Rishi Sunak announced in Wednesday’s Budget that they will start being taxed as commercial vehicles again from Thursday, saving owners thousands of pounds a year, with motorhome road tax reverting to £265.
The National Caravan Council had campaigned against the new tax on motorhomes, and the decision is a huge boost to motorhome manufacturers, and of course anyone looking to buy a new motorhome in 2020.