New Static Caravan VAT April 2013

I have written about this previously, but I think now is the time to go into further detail about the 5% VAT introduction on new static caravans which comes into force in April 2013.

VAT has always been applied to “removable” items in your new static caravan. This included TV’s, fridges and dishwashers etc. VAT was applied to those items at the prevailing rate at the time of purchase.

What is VAT?

VAT or Value Added Tax was designed to be charged on items which were deemed as a “luxury” rather than a necessity. That is why the VAT rate for unprocessed food is Zero Rated. However over the years successive governments have started to apply VAT to services and products to try and scrape as much tax into the coffers as they can get away with. This is why we now have 5% VAT on household fuel which isn’t really a luxury as we all need it to keep warm, but the government sees it as a luxury so there you go, more tax!

It could be argued that female sanitary products are also a necessity, but the government too believes these to be a luxury! You could say that the initial reason for VAT has slipped away and the essence of it now is to tax us as much as possible, or get away with taxing us on non-luxury items if they think we don’t understand the reason behind it!

Why have they changed the VAT rules on new static caravans?

The answer is actually quite obvious – the government needs the money!

The recession has hit government services hard in recent years. Large cutbacks are continuing as many departments are faced with economic issues that their annual budgets can’t meet. Therefore HMRC now needs to get as much money back in as possible to try and support the public sector whilst the private sector carries on struggling to keep their heads above the water.

Governments are great at targeting minority sectors where they think it will not hit the radar of the great British press. The static caravan industry was one sector they thought they could tax and get away with, however as an industry we hit back!

How the Static Caravan industry hit back

The initial VAT rate was proposed at 20% and this was then passed by the government and subsequently scheduled for introduction in October 2012. This would have placed an extra cost to holiday home owners of £6000 on top of the price of an average new static caravan. Manufacturers, holiday parks and businesses that rely heavily on tourist trade would have been hit so hard that many would have gone out of business which would have resulted in 1000’s of job losses.

The main problem is that UK holiday destinations suffer from lack of investment and unemployment levels are already extremely high when compared to other areas of the UK. One example is Rhyl in North Wales where there unemployment rate is at 36.5%* and this would have extended further should holiday home ownership drop due to the VAT introduction.

As an industry, we took this extremely seriously and gave the government such strong views that the national press took up the story. We argued that if static caravans should be charged VAT at 20% then surely the building of second homes made from bricks and mortar should also be charged VAT at the same rate.

This seemed to hit home and got the government talking to us and many local council officials backed our cause. One policy for the government is to help the struggling building sector. Therefore charging VAT on new build properties was a hornets nest that they didn’t want to mess with. Our argument was also followed up with job losses, which again the government are trying avoid so all in all, we got a result – not the perfect one, but at least something in the industry’s favour.

VAT was subsequently reduced to 5% and then pushed to become enforced in April 2013. This gives us the rest of this year to sell as many new static caravans as possible before the 5% introduction. It is not a perfect solution to the problem, and there will be issues for manufacturers and holiday parks in trying to sell new static caravans, but at least the levels of concerns have been mitigated for now.

Post April 2013 we will be looking carefully at the impact this has made on those that will be effected by the VAT introduction. I personally hope that manufacturers and holiday parks will work together to help promote the virtues of buying a new static caravan to prospective owners and also keep their prices competitive to keep the industry going whilst inflation is where it is and salaries are rising to meet higher costs. If this happens, we can keep the industry going and hopefully booming in the coming years.

* Source: Denbighshire Council Website

Selling Your Static Caravan

Was it an exciting time for you when you bought your new static caravan? Did you look forward to spending the summer at your chosen Holiday Park in your new purchase? The answer to those 2 questions is probably “Yes”.

But as time moves on your static caravan gets older. Sadly due to their construction it should always be at the back of your mind that at some point you are going to have to sell it and probably buy a new one. I have been asked on many occasions about a policy that many holiday parks have in relation to the age of a static caravan before it will be removed from their park. However I believe that you should start thinking about selling your caravan well before that becomes a reality for you – here is why.

Your static caravan does have a “life span”. This is normally around 15 years, at which point the weather will have caused damage to the structure that can’t easily be repaired and the value of the unit will be significantly less than what you paid for it all those years ago.

However I would like to suggest a few tips on when to sell your static caravan and how to do it so you can maximise what capital is left in it.

1. Sell before it is 9 years old
   We are all aware of depreciation and in this regard your static caravan isn’t too dissimilar to that of a car. When you first buy it you will lose a significant amount of the value through depreciation. However the next big milestone is 10 years. If you can sell your static caravan before this time, then you can still get a decent amount for it on the market. It will still have a good 5-6 years left (more if it’s been looked after) and will give you an “OK return” if you sell now.
2. Part Exchange rather than Private Sale
   If you Part Exchange your static caravan with your holiday park’s sales office they will give you the best value for it. They will look at the model the you are wishing to buy and then work out where they can make their profit margin. This has always been the best way of buying and new static caravan when you have a second hand static caravan to swap.A Private Sale can get you a good return, however there are issues you should be aware of. “Tyre Kickers” are the first hurdle. You will get many prospects looking to buy, but they are just shopping around and wasting your time. The second downfall of a private sale is haggling. In today’s market many people are looking for discounts and you may find yourself haggling with them as they try and get the price down.

   If I were you I would always speak to your caravan park sales office as they will try their hardest for you and give you as much money for your old static caravan as possible.

So there we have it, 2 top tips on how and when to sell your used static caravan. I always welcome comments on my posts so please let me have any questions or feedback and I will respond as soon as possible.

Customer Service

I had to post something today on customer service. This isn’t related to static caravan customer service, but something related. Today I had to contact a few electrical generator companies to find a connection lead which fits one of our showroom static caravans that is on site at a garden centre in Cheshire.

I called two companies local to the area and the customer service I received was shocking.  When I called the first company based in Nantwich (I will not name and shame them) I explained what I was looking for and they asked me to call back in 10 minutes – he didn’t hang up but answered another call on his mobile phone so I listened into the conversation!

It was shocking that as I was looking for a small item I was shoved to the bottom of the pile and asked to call back. He didn’t even ask me for my details so he could call me back! I was just dismissed out of turn for a call probably of higher value such as the hire of a generator.

The second call went as follows: I called and again explained my situation. I was told that I should speak to the “spares department”. I was told that they weren’t in until 3.30pm (I was calling at 10.00am with an urgent requirement!) and therefore couldn’t help. I asked if they knew of anywhere else that could help and the phone call was then quickly terminated without a goodbye or any polite close.

OK, I know that I was asking for a small accessory, but surely in today’s economic climate a “sale is a sale” and customer service should be of the highest calibre in order to win even the smallest deal possible. This would help their business by giving me a reason to remember them and then recommend them to other people.

In the end I went to B&Q in Crewe. I spoke to a member of staff and asked them if they had one in stock. Not only did the person take me to the alise, they advised me on the correct one, took me back to the till and processed the purchase for me! It is great to see that larger companies offer good customer service, but sad to see that smaller ones don’t!

Is this a reason as to why so many are going under? I’m not sure that this one experience can answer that question, but I would hope that this would be a lesson learned if they read this post and that they improve their support to customers in the future.

The Lawns Show – Static Caravans and Park Homes

The Lawns Show is coming up next weekend (1st and 2nd September) in Hull. This is the first chance of the year for holiday park owners, manufacturers and businesses related to the “trade” side of the holiday industry to get together before the season closes and we prepare for 2013.

As we are a new business we are heading up there to try and get our message out. We are hoping to meet some manufacturers and park owners so they can get a better understanding of what we are trying to achieve with DirectCaravans.co.uk.

If you have visited our website before you will have come to realise that we are trying to focus buyers on new static caravans rather than opting for used static caravans. The virtues of buying new far out weigh those of a second hand model, and we hope that the Lawns Show will help us do that.

Located near Cottingham the show is held near to where manufacturers are based. This will allow them to get their new 2013 models to the show with ease and it will be a first-preview for the public. It will also allow Direct Caravans to get an idea of the level of work required to get the new models on the website prior to their sale release so we will be able to give you sneak previews of what to expect next year.

At these shows we should also see the British Holiday Homes Parks Association and the National Caravan Council. Both of these bodies do great work within the industry to help promote the benefits of all levels of “caravan ownership” to a wide public audience.

If you are going to the show, let us know and we can arrange to meet up! We are not faceless here at Direct Caravans and it would be great to have a chat and see if we can help you get more from your holiday park advertising budget, your static caravan or help promote your park and related services.

 

Holiday Parks in North Wales

North Wales is a great place to enjoy a holiday. Be it a weekend break for a few weeks, there are plenty of attractions which cover all of the North Wales region. Holiday Park in North Wales are aplenty. They offer a variety of facilities which attract both families and couples.

This post isn’t designed to highlight them all, but is designed to show you what kind of Holiday Parks are available and what facilities they offer.

Rhyl
Holiday Parks in Rhyl offer close access to the resorts “fun centre”. Tailored towards families there are plenty of attractions which include:

• Palace Fun Centre
• Pavilion Theatre
• White Rose Centre

Whilst many others are available you and your family can enjoy these facilities in both sunny and wet weather.

Porthmadog
Porthmadog is a port town with a vibrant high street which offers a great selection of shops, cafes and restaurants. Being close to Black Rock Sands it also offers you the chance to spend the day on the sandy beach when the sun shines.

Other facilities include:

• Ffestiniog & Welsh Highland Railways
• Portmerion
• Black Rock Sands

Accommodation is widely available with Aberdunant Hall, Holiday Park and Hotel offering a great place to stay as well as other B&B’s, Holiday Parks and Hotels in the town itself.

Caernarfon
Nestled near to Bangor and Anglesey, Caernarfon is a wonderful harbour town with its famous castle. You are close to the A55, which provides fast access to attractions towards Rhyl as well as Anglesey itself. Caernarfon is a good base for your holiday with Holiday Parks, Hotels and B&B’s widely available.

These are just three areas in North Wales where Holiday Parks provide you with a great base to enjoy your holiday in North Wales. For more information on attractions around the area the website Visit Snowdonia is a great resource for you to bookmark.

Static Caravans in Wales

The weekend has seen an increase in prospective static caravan buyers visiting North Wales Holiday Parks. We have spoken with a number of them over the weekend and it seems that people are looking for new Willerby, Pemberton and Atlas static caravans.

This would not mean that other manufacturers are being left out, it’s just the ones we have spoken to have buyers looking at those brands.

The good news is that we have people wanting to buy! June is normally a quiet month for holiday parks until the main children’s holidays start in July. However this small increase in footfall has given the parks we have been in contact with renewed hope that they will be welcoming new owners to their site this month.

We’ll keep track on things and keep you informed.

Static Caravan Jubilee

Many of us enjoyed the extended Bank Holiday in our Static Caravans. Our park in particular was extremely busy with revellers. Having been on our holiday since Sunday evening we saw some new static caravans that caught our eye.

It seems that the Diamond Jubilee has given some people time to prepare for the 2012 season with the purchase of a new static caravan! Thisis great news as it ensures that jobs in Hull are being protected?

So this brings me onto what we saw this weekend. There was a new BK Bluebird Sheraton. I managed to get to speak to the new owner and he gave me a tour.

I haven’t actually seen inside of this model and I must say I was very impressed. For a sub £40,000 model the caravan certainly packs a lot inside. With the revolving Flatscreen TV and free standing furniture it made the living space a great place to be.

In addition the master bedroom not only felt airy but also gave room for plenty of storage space which really made the static caravan feel that it could easily cope with a decent length of time in terms of a holiday.

I also managed to talk to a owner of the Pemberton Park Lane. Now this static caravan is more like a home! It has some wonderful features, with co-ordinated styling as this really did set it apart from many other similar caravans in its class. Ironically I spoke to someone today who was looking to buy one for a farm near Malpas. He seemed extremely keen on getting hold of one of these and I think he was looking at the potential rental market. I’m sure that if he does go ahead he will get some great reviews from the people who stay there.

All in all it’s been a weekend of festivities as well as some considered purchases. People are looking at buying a static caravan which is wonderful news and I am sure they will enjoy many years of happy holidays as a result.

TripAdvisor – Good or Evil?

I have spend that last few weeks meeting with a number of holiday park owners. When I setup DirectCaravans.co.uk I decided that I wanted it be everything that was good about a website and that is the message I am trying to get across to the industry.

But it seems that there is a gripe amongst holiday parks that rent out static caravans, holiday homes and lodges to the public and it’s all been about TripAdvisor.

TripAdvisor is a great idea. We go away for a few nights and then tell everyone about how we got on. That way other people can make an informed decision rather than relying on the clever marketing material that has been created by people like me. But it seems that the essence of TripAdvisor is being lost here in the UK.

Us “Brits” are not ones to complain face-to-face. We will grin and bear a situation and then moan about it later and this is the problem it seems with TripAdvisor. It doesn’t cater for people like us, or should I say the ones that won’t complain at the time about something and then go on and on about our experience later.

This doesn’t help UK holiday parks. The gripe is that if something is wrong the management are more than happy to fix it or move the holidaymaker to an alternative caravan or lodge, but they don’t get the chance.

The next thing you know they see a TripAdvisor review entitled “XXXXX Park, Bad Experience” and although they can respond to the moan there is little they can do about it after!

The point of this post is to highlight to consumers that if you have a problem, even though it may be small, please mention it to the management of your holiday park. They will be more than happy to look after your every requirement and they want you to have a nice time with them. If you can’t resolve it then give a bad review, but at least give them the benefit of the doubt. They rely on repeat customers and they want their park to be perfect for you so if you say something they will do something about it.

There you go, let’s hope that this helps both sides of this story out!

Static Caravan Tax U-Turn

Recent U-turns by the Government have saved the static caravan industry from massive jobs losses by not charging VAT at the rate of 20%. The impact would have been huge, with an already hard hit industry being charged more tax when actually it doesn’t help the Government in the long term – are they just looking at quick fixes rather than a long term plan?

George Osborne retreats on Static Caravan Tax

George Osborne’s plans to tax static caravans was planned to be introduced in October 2012 but the real impact wouldn’t have hit the industry until later next year when sales would have dropped right at the beginning of the season.

The coalition government are frantically trying to new-fangled find ways of reducing the debt level. Some of these are evident, but this one was devious and sneaky as a static caravan is not one of those purchases we all tend to make on a regular basis and therefore wouldn’t have been noticed that much!

However we have been given a life line. Many in the industry have clubbed together to help devise a strong argument that it was not just about he why VAT shouldn’t be applied to a static caravan, but also the impact it would have on real jobs and real tax payers.

Our argument has focused on that a static caravan is not a luxury item. Second homes that are constructed from bricks and mortar are and they are not levied VAT so why should static caravans?!  When this argument was presented I can imagine that many in the House of Commons were thinking about their own second homes and those of their constituents that have put them into power in the first place.  This is not a political article, but moreover one of setting a precedent that would have impacted their voters hard rather than gaining anything of real value in terms of revenue for HMRC.

There is an old saying of “never defecate on your own doorstep” and in this case it seems the government tried and realised it was a bad idea.

We are now left with a 5% levy on sales of new holiday homes. It isn’t the total U-turn we were after, but it isn’t such a bad deal. We know that government needs to reduce the debt level in the UK so it’s a compromise. But please be wary!  Keep a watchful eye on ways in which the Government will be able to recoup the loss of £71m in tax receipts as a result of these U-turns.

As an industry it seems we are extremely pleased by the compromise that has been reached and hope that this will not impact too heavily on those people looking to buy a new static caravan during the winter and into 2013. The summer is coming and we need to keep sales in static caravans moving throughout the season so if we can support holiday parks, pass on the good word about how great the holidays you can have are and spend our hard-earned money within the tourism industry we should be looking at a brighter future.

Visiting North Wales

I’m off to North Wales this weekend to meet up with a few holiday park owners to discuss advertising on my website. They are interested in working with someone who has knowledge of digital marketing and the static caravan industry……..that will be me then!

It’s going to be interesting. Having just launched DirectCaravans.co.uk I am interested in getting feedback, understanding what parks want from online advertising as opposed to normal search engine optimisation.

I hope to bring you back some good results for my posts next week!