Dave Thompson MSP

Dave Thompson, MSP for Skye, Lochaber and Badenoch has accused the Chief Secretary to the Treasury, Danny Alexander, of discriminating against first time buyers.

Static caravans are currently VAT free but will be faced with a 20% levy from 1 October 2012 as part of the 2012 Budget. Mr Thompson has written to Mr Alexander to register his concern that VAT will have a negative impact on tourism and on first time buyers. Tourism is the largest industry in Mr Alexander’s constituency and the VAT increase will have obvious repercussions for tourism. For first time buyers in the Highlands and Islands, static caravans are often the only option financially. Levying 20% VAT on static caravans will mean that young couples in a caravan have to pay VAT, whereas couples in a new-build house or a Principal Private Residence do not. This, of course, flies in the face of the principle of equal taxation.

Mr Thompson said, “Once again we’re faced with the stark reality that the 2012 Budget treats people unequally and discriminates against those that are less well off. Not only will the tourism industry come under pressure, but those who cannot afford to buy a house will have even more to pay.

“Tourism is vital to the Highlands and Islands and anything which hinders the growth of this industry is detrimental to the local economy. Danny Alexander is proposing to damage the largest industry in his constituency. But, what he might have missed is the huge impact this tax will have on first time buyers, who are struggling to get on the property ladder and who will start with a static caravan. While other couples in a new-build or in a Principal Private Residence do not pay any VAT, couples in a static caravan will need to pay VAT from 1 October.

“I hope Mr Alexander recognises the magnitude of the potential damage this VAT increase could cause and reverse the decision to levy VAT on caravans.”