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Get the facts

As a result of a technicality under new EU regulations, new motorhomes with a WLTP Euro 6D/2 are no longer subject to a commercial vehicle tax band in the UK. Instead, they are, for the purposes of Vehicle Excise Duty (VED), now taxed as a car. 

To classify motorhomes as cars for taxation purposes is clearly wrong and will have a devastating effect on the motorhome industry.

Why motorhomes should not be taxed as cars

  • UK motorhomes are built using a commercial base vehicle, fitted with a commercial engine. These base vehicles are constructed by commercial base vehicle manufacturers (incomplete vehicle) and are then converted into motorhomes by UK-based motorhome manufacturers.

  • The choice of base vehicles available to motorhome manufacturers/converters is extremely limited. 96.9% of all UK motorhomes are built on chassis providing only four engine choices – all diesel – with output which exceeds the maximum emissions threshold for cars.

  • As a motorhome uses a commercial vehicle as its base, it has a unique vehicle classification (M1-SA) as a special purpose vehicle and has historically been taxed as Private Light Goods commercial vehicle (PLG- 3,500 kg and below), or Private Heavy Goods commercial vehicles (PHG – over 3,500kg).

  • From 1 September 2019 new emission regulations (WTLP) require the CO2 emissions for all vans and cars to be stated on the approval paperwork. As a result, a new motorhome with a WLTP Euro 6d/2 engine registered with DVLA has, for the purposes of VED, been moved out of the commercial vehicle tax band (private lights goods PLG/PHG) and is now taxed as a car.

  • The new emission regulations are important, and it is right that the taxation system encourages new car owners to choose cleaner, more efficient engines from the numerous ranges of engines and models available. However, as motorhomes have commercial engines, new owners do not have a wide range of choice and because of their unique classification, motorhomes now attract the highest car tax, even if the cleanest and most efficient engine is installed.

  • Any tax incentive to help encourage motorhomes buyers to purchase cleaner vehicles is irrelevant until there is a greater choice of low-emission commercial base vehicle options available to motorhome manufacturers/converters. 

  • Motorhomes, unlike cars, are used for holidays and short breaks – on average 3,000 miles per year. Whereas a light commercial vehicle can do circa 12,800 miles per year, using the same base vehicle and emitting the same CO2 per mile, but will be subject to a lower rate in VED.

 

What does this mean for manufacturers?

ManufacturersMotorhomes are a manufacturing success story in the UK and sales have been holding up reasonably well in recent years - more than 14,500 new registrations were recorded in 2018. However, like many other UK industries at present, the motorhome market continues to face a number of different challenges.

Motorhomes have already been subject to a large price increase for next season’s models, which take into consideration a number of factors, not least the weakening of sterling, Brexit challenges, but also new, cleaner, but more expensive engines. This additional registration increase of nearly £2000 will have a significant impact on UK motorhome manufacturers, their employees and the entire industry. 

Government taxing motorhomes as cars will see a substantial fall in production, collapse in demand for new products, and associated job losses throughout the supply chain.  

 

What does this mean for dealerships?

DealersDue to increasing political uncertainty in the UK and the approaching Brexit deadline, motorhome dealers are already facing concerns over consumer confidence.

The application of car registration tax charges to motorhomes means dealerships are likely to experience anti-competitive trade within the market between regional dealerships, with many avoiding making contractual commitments with motorhome manufacturers for those new WLTP motorhomes that attract the additional vehicle registration charge.

The National Caravan Council (NCC) has already produced a series of important guides for its dealer members to help deal with questions from confused customers and answer issues over end of series derogated vehicles (older engines Euro 6b/1). These guides, only available to NCC members, can be accessed via the link below.

CLICK HERE TO ACCESS INDUSTRY GUIDANCE FROM THE NCC (MEMBERS ONLY)

 

What does this mean for motorhome buyers? 

BuyersUltimately, motorhomes being classified as cars for taxation purposes means consumers will be forced to foot the bill for this increase in tax. 

The initial registration tax for a new motorhome with a WLTP Euro 6D/2 engine has been increased from £265 (PLG rate) up to £2,135 – a 705% increase. Further increases per year for the subsequent five years of ownership after first year registration mean that a motorhome with a WLTP Euro 6D/2 engine will cost £2870 more than it would under the existing VED system for motorhomes. 

This draconian rise in motorhome tax makes it difficult for buyers to keep up with the costs of funding their passion to explore the great outdoors with cross-generational family. This will drive a reduction in the number of motorhome holidays taken in the UK, a significant impact upon domestic tourism and a dramatic fall in the sector's current contribution to the UK economy.