The change is being made to put the UK in line with EU regulations. The average cost change for those effected will be approximately £100 per year, earning Her Majesties Revenue and Customers £3 million per annum.

Water, sewage and bills for first time connection to utilities were previously zero rated for caravans but this will end next year. Representatives from the UK holiday industry have said that the changes are an unwelcome change that will be an administrative burden and an unneeded extra cost for the holiday industry.

The government take the opposing view that caravanners have merely had a fortunate break up until this point and are now having to pay the same charges as everyone else.

Some purchases of boats will also be affected. Boats that are purchased by UK residents for use outside of the UK will now also be liable for VAT payments, unless the manufacturer takes the boat to the non-EU destination. The luxury yacht market often operates by customers purchasing boats and then sailing them to the desired location. This is no longer acceptable unless the full rate of VAT is paid on the purchase.

Proposed green taxes that may well come into force within the near future will also see a further onus placed on the caravanning industry. It is probable that the government will choose to raise taxes on fuel in the near future resulting in petrol prices rising above £1.50 per litre. This percentage increase will hopefully not dampen the UK holiday industry.

Many more people have been turning to the UK countryside as a way of saving money on what have now, thanks to higher plane ticket costs and poor exchange rates, become expensive foreign holidays. But it will mean a noticeable additional cost for those that are looking to travel across the country and it may result in higher use of more local facilities rather than ones at the end of long journeys.

Previously caravans measuring more than 2.3m wide had to be towed by a car with a gross weight of over 3500 kg. VAT did not have to paid on any caravan over 2.3m wide. After the 20^th April the standard VAT rate of 17.5% will be resumed on any caravan up to 2.55m wide.

The changes have come about after a challenge from the European commission. The aim of the changes is to bring the U.K. into harmony with regulations across Europe. The changes have been made in the form of amendments to the Road Vehicles (Construction and Use) Regulations of 1986.

What this means for caravanners is that if they purchase a caravan between 2.3 and 2.55m wide in the next seven days VAT will not be payable. This represents a significant saving. However it will not be road legal until the 20^th April if it is to be towed by a regular car.

Reactions from the caravan community have been general positive. A number of commentators have highlighted the benefit of having an increased range of road legal caravans for users with regular cars. Many people have already benefited from what is effectively a VAT suspension on larger caravans which are due to become legal next week.

U.K. tourism will also potentially increase thanks to this legislative change. Many European caravanners have vehicles that can, at the moment, not be driven legally in the U.K., but from April the 20^th they will be able to bring their caravans to the U.K. for holidays, hopefully having a positive impact on the tourism industry.