Huge tax increase for new motorhomes!

[brom]

A very worrying article in this month's (i.e. September!), What Motorhome, about tax changes which, the article says, 'could add up to £4,460 in additional registration tax and Vehicle Excise Duty (VED) over a period of six years'. It's well worth a read.

 

All new motorhomes registered after 1st September 2019 ( i.e. in 2 weeks' time), powered by engines meeting Euro 6d/6.2 emission standards, will apparently fall into a higher VED band. Earlier Euro 6b engines (theoretically dirtier), aren't affected. Very logical!

 

It seems Europe-wide regulations (which will presumably continue to affect us even if we leave), now require post-September 2019 registration papers of commercial vehicles to state the CO2 emissions levels. Previously this only applied to vans like the California; made by VW as a specific model, and therefore having their emissions level spelt out. This change has given the Treasury the opportunity to hammer the motorhomer.

 

The article says that these new motorhomes will be taxed as CARS, not commercial vehicles, whether under, or over, 3,500kg. So, the first VED will rise from £265 to £2,135, (705% increase), and an annual charge of £465 for five years.

 

However, if the new vehicle, with exactly the same engine, is used as a commercial, then its tax will stay at £265!

 

Not unnaturally, the NCC is resisting this change - which, in my view, could kill the UK industry stone dead, if the increases are combined with the effect of any penal tariffs imposed by the EU when/if we have the temerity to leave Europe in October.

 

Perhaps we should be lobbying our MPs, particularly those whose constituencies are home to motorhome converters. The Treasury says it does 'recognise the concerns of the sector, and will keep all taxes under review', so presumably will alter the classification once it's clear the native industry has been flattened, so as to allow foreign converters to fill the gap!

 

There's another problem, too, which seems to be hitting those who are converting campervans (especially home converters). Previously, to have the vehicle classification changed to a Motorcaravan when conversion was complete, all you had to do was prove it had the basic facilities, like bed, table, storage etc., take some photos and send your V5C in to DVLA. Shortly afterwards, your V5C was returned, suitably modified, and you could drive at the higher speeds applicable to private cars. Now, things have changed, and the V5C is coming back classified as 'Van with windows', because it still looks like a commercial. Whether this applies just to rising-roof vans which, it might be argued, do look like commercials to the uninitiated, even if festooned with awnings and bike-racks, or also to high-tops, isn't yet clear. What reaction insurance companies will have is also unclear (previously, they generally used to require re-classification as a 'motorcaravan' as a condition of insurance).

 

All very unhelpful!

[Derek Uzzell]

This earlier forum thread refers

 

https://forums.outandaboutlive.co.uk/forums/Motorhomes/Motorhome-Matters/Tax-changes/52822/

[brom]

Derek Uzzell - 2019-08-18 1:53 PM

 

This earlier forum thread refers

 

https://forums.outandaboutlive.co.uk/forums/Motorhomes/Motorhome-Matters/Tax-changes/52822/

 

Sorry - had missed that!

[Deneb]

https://forums.outandaboutlive.co.uk/forums/Motorhomes/Motorhome-Matters/Tax-changes/52822/

 

Lots of information and comments there, but a couple of points based on your post:

 

The current annual tax charge for light commercial vehicles registered on or after 1st March 2001 is £260, not £265 (tax class 39). If the light commercial vehicle is a Euro 4 registered between 1st March 2003 and 31st December 2006 or a Euro 5 registered between 1st January 2009 and 31st December 2010 its annual tax charge is £140 (tax class 36) so there is precedent for newer cleaner vehicles to attract a higher rate of tax.

 

£265 is the annual tax charge for private cars or light goods vehicles first registered prior to 1st March 2001. It also happens to be the current rate for motorhomes not exceeding 3500kgs MAW, but that is only because most have traditional had no CO2 figure stated on their final stage CoC, and DVLA decided to use the "old" PLG tax class for the vehicles because they didn't fit in any others.

 

The only other comment I would add is that, outside of the motorhome industry and potential customers for brand new motorhomes, I doubt you will find many people who think it is terrible that what are after all expensive luxury items with fairly high emissions figures in relation to the average privately used vehicle should not be expected to pay a similar amount of tax to all other private cars of a similar list price or emissions group.

 

The current Petrol Car and Diesel Car tax rates include the "additional rate" for the first 5 years for vehicles with a list price over £40,000 to disincentivise the purchase of vehicles that are generally larger and therefore/or have larger and more polluting engines than smaller/less costly vehicles.

 

Vehicle tax for "commercial vehicles" is generally lower because they are primarily used for the transportation of goods or burden and taxing those vehicles more heavily would likely add to the costs of goods and services bought in shops and elsewhere.

 

Even as a motorhome owner and user, I cannot see how such a vehicle being used for leisure purposes could ever be described or recategorised as a commercial vehicle. Be careful what you wish for, there would be other implications in being categorised as goods vehicles,and I cannot see a situation being allowed where legislation says that a vehicle is one type of vehicle for one piece of legislation, but a completely different type of vehicle for all others.

 

So, whilst as a motorhomer I would not exactly be ecstatic at having to pay the current vehicle tax rates to own a brand new van, I cannot see in the current social and political climate that there is going to be a majority consensus that the taxes everyone else has to pay to own and drive petrol or diesel cars is an unfair burden on the owner of a luxury leisure vehicle.

 

Will it affect the sales of new motorhomes? I suspect there may well be some effect, but when I see people trading in vans that they have only owned for a year or two at most because the new model has slightly larger lockers etc. the "new" tax cost seems insignificant in relation to the amount of money they seem prepared to splash around without concern already.

 

It is worth noting that the current tax rates for those vehicles, which will include motorhomes with the new WLTP approvals, are actually almost half of the old PLG annual rate when the additional rate payable for the first 5 years expires. So, whilst the initial tax cost is a burden on the first owner of a brand new van, for a second or subsequent purchaser the overall cost may be similar or even lower than the current PLG rate when aggregated over length of ownership, especially if the "current" PLG rates are increased above inflation at some future stage in an attempt to incentivise the removal of older dirtier vehicles from our roads (bearing in mind the tax class is intended for vehicles registered prior to 1st March 2001, and motorhomes are only allocated to that tax class due to the anomaly of having had no emissions data on their final stage CoCs.

 

And looking at a chart of emissions related vehicle taxation across Europe, the UK burden pales in comparison to the 10,500 euro additional purchase tax that the French have either implemented or intend introducing for higher emissions vehicles.

 

Sorry, but that's the way I see it, and I also feel that too much in the way of protest might actually backfire by highlighting the rates of tax that current motorhomes have been "getting away with" over the last few years by virtue of having been slotted into a tax band actually intended for vehicles currently at least 18 years old or more, with a possible adverse effect on their tax treatment as well.

[Deneb]

brom - 2019-08-18 1:09 PM

 

There's another problem, too, which seems to be hitting those who are converting campervans (especially home converters). Previously, to have the vehicle classification changed to a Motorcaravan when conversion was complete, all you had to do was prove it had the basic facilities, like bed, table, storage etc., take some photos and send your V5C in to DVLA. Shortly afterwards, your V5C was returned, suitably modified, and you could drive at the higher speeds applicable to private cars. Now, things have changed, and the V5C is coming back classified as 'Van with windows', because it still looks like a commercial. Whether this applies just to rising-roof vans which, it might be argued, do look like commercials to the uninitiated, even if festooned with awnings and bike-racks, or also to high-tops, isn't yet clear. What reaction insurance companies will have is also unclear (previously, they generally used to require re-classification as a 'motorcaravan' as a condition of insurance).

 

All very unhelpful!

 

In relation to this point as far as I'm aware it's nothing new, having been implemented almost 10 years ago, and only applies to applications to change the body type of vehicles not originally constructed as motorhomes by a multi-stage converter, and registered as such from the date of first registration.

 

I can explain a little as to how it came about. In 2008, as a result of some very diligent detective work by one of my then colleagues from another constabulary, it became apparent that thieves were stealing motorhomes and, by various physical methods, cloning them onto the legitimate identities of commercial vehicles of the same make and model as the motorhome base.

 

In that way it was extremely easy for them to obtain a genuine V5C for an ostensibly legitimate motor caravan, because all they had to do was notify the change of body type on the V5C for the legitimately acquired "donor" commercial vehicle, which may have been in some cases little more than a written off shell, and submit photographs of the interior of the stolen motorhome.

 

Eventually, we identified over 800 motorhomes which had been stolen and "converted" by that method. There may well have been more, but the investigation consumed so much time and resources nationally that a halt had to be called at some point.

 

But, after discussion with the DVLA regarding the ease with which such stolen vehicles could be disguised, legitimised and passed on to unsuspecting purchasers, facilitated by their procedures, it was recognised that the process had to change!

[brom]

The problem, with the change of attitude by DVLA, appears to have arisen just this year. Until then, the system of changing the classification to 'Motorcaravan' appeared to work without difficulty. Indeed, my own van was changed in this way after conversion, and took just a week.

 

However, it has been reported in T6 Forum, (dealing with VW Transporters), and covered in a lengthy thread by a number of different posters,

('V5 Documentation - Dvla Rule Change For Motor Caravan Reregistration June 2019')

that it has become impossible recently, to effect the change to 'Motorcaravan'. The justification seems to be based on the external view of the vehicle and the ostensible difficulty in recognising it as a campervan; I've not seen anything referring to the cloning or other criminal activity such as you suggest. Not to say that isn't a factor, but from reading the thread, DVLA are largely refusing to engage with queries, so it's hard to know.

[Don636]

As I understand it the big concern will be the additional tax for vehicles over £40,000 for years 2 to 6. I read somewhere recently that the £40,000 applies to the base vehicle price rather than the final converted price which would mean this is unlikely to apply. Does anyone have any info on this?

[Deneb]

brom - 2019-08-18 3:31 PM

 

The problem, with the change of attitude by DVLA, appears to have arisen just this year. Until then, the system of changing the classification to 'Motorcaravan' appeared to work without difficulty. Indeed, my own van was changed in this way after conversion, and took just a week.

 

A quick google search shows quite a few posts on various forums where it has been an issue since 2010, which would have been about the time the change was implemented.

 

However, it has been reported in T6 Forum, (dealing with VW Transporters), and covered in a lengthy thread by a number of different posters,

('V5 Documentation - Dvla Rule Change For Motor Caravan Reregistration June 2019')

that it has become impossible recently, to effect the change to 'Motorcaravan'. The justification seems to be based on the external view of the vehicle and the ostensible difficulty in recognising it as a campervan; I've not seen anything referring to the cloning or other criminal activity such as you suggest. Not to say that isn't a factor, but from reading the thread, DVLA are largely refusing to engage with queries, so it's hard to know.

 

They wouldn't mention any criminal activities publically, particularly where it may reflect on their processes, but I believe the publicised wording of the decision at the time was that "following a large increase in the number of applications to change the body description on the V5C to motor caravan, a review has taken place following consultation with the police and ABI..."

 

The reference to the police and ABI is significant if you are aware of the back story ;-) You wouldn't expect them to issue a press release saying that "after it was brought to our attention that we had unwittingly assisted in the disguise and disposal of a large number of stolen vehicles..."!

 

But, as with all things involving the huge monolith that is the DVLA, don't expect consistency. I believe Derek recently referred on another thread to the amount of tranquillisers you should obtain before entering into any sort of dialogue with them.

[Deneb]

Don636 - 2019-08-18 4:05 PM

 

As I understand it the big concern will be the additional tax for vehicles over £40,000 for years 2 to 6. I read somewhere recently that the £40,000 applies to the base vehicle price rather than the final converted price which would mean this is unlikely to apply. Does anyone have any info on this?

 

My own understanding is that is another piece of incorrect information that seems to have originated from a dealer. I believe it to be based on the list price of the completed vehicle. This has been applicable to motorhomes subject to their meeting the conditions since April 2017. It's just been the case until now that most have not been within scope due to the absence of relevant emissions data.

 

https://www.gov.uk/vehicle-tax-rate-tables states, in respect of cars and some motorhomes registered after 1st April 2017:

 

"You’ll pay a rate based on a vehicle’s CO2 emissions the first time it’s registered. This applies to:

•cars

•some motorhomes

 

Your motorhome’s included if both the following apply:

 

•it’s in the M1SP category - check with your dealer if you’re not sure

 

•its CO2 emissions are included on the ‘type approval certificate’ (this might be called a ‘certificate of conformity’ or ‘individual vehicle approval’)

 

If you have a different kind of motorhome, you pay tax in a different way."

 

The latter being the "old" PLG class.

 

[brom]

Interesting!

[Billggski]

The excise duty is based on the list price plus any extras, to stop dealers quoting a low basic price and then adding luxury items. So it will be the finished vehicle price that counts.

 

"The premium tax levied on cars that cost more than £40,000 (and which is payable from years two to six) will also rise from £310 to £320 per year. The premium tax is based on the car’s quoted list price before discounts, plus any options you’ve added. The list price should include on-the-road costs such as delivery and numberplates but excludes the first year’s road tax and initial registration fee."

[Don636]

Can you not register the base vehicle before conversion to get round the £40k list price issue?

[Derek Uzzell]

The 1st attached image below shows a pair of ‘back-to-back’ Fiat Ducato cab units that will eventually have AL-KO chassis grafted on to them before the final conversion takes place. Renault Master cabs intended to receive an AL-KO chassis can now be delivered similarly.

 

When an A-class motorhome is to built on an AL-KO chassis, a ‘cowl’ is provided rather than a cab and (as shown in the 2nd image below) this has no surrounding body panels, nor even seats.

 

I’m sure you will accept that neither ‘cab only’ nor ‘cowl only’ units could be UK-registered before conversion into a motor caravan began, and that will equally be true for any coachbuilt motorhome.

 

Historically, it was not uncommon for a ‘commercial' panel-van to be UK-registered, converted into a motorhome and then be redesignated as a “Motor Caravan”. In principle this could offer the opportunity to side-step the £40K threshold - in practice (from what’s been said above) the DVLA will no longer permit this. I suppose you could purchase a new panel-van for say £25K and UK-register it and then spend another £20K converting it into a ‘motorhome’, but you’d end up with a panel-van with a motorhome specification not a genuine Motor Caravan.

 

A further complication if up-to-3500kg MAM motorhomes are generally assigned to the UK’s emissions VED classes, is the question of what would happen VED-wise if a motorhome’s MAM were to be uprated or downrated across the 3500kg threshold. This is straightforward enough now, as the vehicles just move between the PLG and PHGV VED classes that have a simple ‘fixed’ fee system that does not involve CO2 values nor any cost-of-vehicle limit.

[Deneb]

I believe if a pre-registered van is converted by an established converter who is authorised to issue a CoC, there should be no problem with DVLA. The restraints are intended to catch self-build or ad-hoc conversions and at least make checks into the authenticity of the applications more robust.

 

I believe that Wildax will, or have in the past converted second hand vans for customers on request.

 

But apart from those circumstances, which would only realistically apply to PVCs, I agree with Derek's comments. I also suspect that if a company were to conduct a business model of regularly converting essentially brand new but pre-registered vans they may come under some scrutiny from the authorities post WLTP.

[colin]

Deneb - 2019-08-19 8:26 AM

 

I believe that Wildax will, or have in the past converted second hand vans for customers on request.

 

 

 

We hired the first (or very early) Aroura Leisure, this was built on a van with about 70,000 on the clock, for a company that also hired plain panel vans.

Not sure they will do that now.

[Derek Uzzell]

There’s a full-page article about this in the latest (September 2019) issue of MMM Magazine (Page 30).

 

The article includes comments from a Treasury spokesperson and there’s some entertaining ‘logical’ argument from the NCC’s Director General.

 

I’d also question the accuracy of some of the statements made.

[plwsm2000]

Derek Uzzell - 2019-08-19 2:09 PM

 

There’s a full-page article about this in the latest (September 2019) issue of MMM Magazine (Page 30).

 

The article includes comments from a Treasury spokesperson and there’s some entertaining ‘logical’ argument from the NCC’s Director General.

 

I’d also question the accuracy of some of the statements made.

 

I just read the MMM article and I think they have missed an important difference.

 

I have just bought a new car and one option was for bigger wheels and tyres. This option alone increased the published CO2 emissions and put the car into the next highest tax category.

How is this going to work for motorhomes then?

 

The CO2 emissions are supposed to be declared at first registration, but many/most motorhomes are sold with dealer fitted optional extras such as awnings, solar panels, satellite dishs, bike racks etc. These will affect (increase) the CO2 emissions so it is not possible to determine the correct CO2 figure unless each and every motorhome sold (that has optional extras fitted) is tested by the dealer.

 

This is just not practical.

 

 

[Steve928]

plwsm2000 - 2019-08-21 1:18 PM

 

The CO2 emissions are supposed to be declared at first registration, but many/most motorhomes are sold with dealer fitted optional extras such as awnings, solar panels, satellite dishs, bike racks etc. These will affect (increase) the CO2 emissions so it is not possible to determine the correct CO2 figure unless each and every motorhome sold (that has optional extras fitted) is tested by the dealer.

 

 

So they're continuing to give motorhomes better treatment than cars then, by allowing us to get away without paying VED on the increased CO2 emissions from fitted accessories. Sounds like a good deal.

[Billggski]

It could be the same for ice cream vans, trucks with tipper bodies, breakdown lorries etc..

Loads of vehicles are altered from a base chassis.

 

[goldi]

Good afternoon,

 

Are they not trying to tax the four wheel drive pickups more of which there has been a huge increase ?

[Derek Uzzell]

plwsm2000 - 2019-08-21 1:18 PM

 

Derek Uzzell - 2019-08-19 2:09 PM

 

There’s a full-page article about this in the latest (September 2019) issue of MMM Magazine (Page 30).

 

The article includes comments from a Treasury spokesperson and there’s some entertaining ‘logical’ argument from the NCC’s Director General.

 

I’d also question the accuracy of some of the statements made.

 

I just read the MMM article and I think they have missed an important difference.

 

I have just bought a new car and one option was for bigger wheels and tyres. This option alone increased the published CO2 emissions and put the car into the next highest tax category.

How is this going to work for motorhomes then?

 

The CO2 emissions are supposed to be declared at first registration, but many/most motorhomes are sold with dealer fitted optional extras such as awnings, solar panels, satellite dishs, bike racks etc. These will affect (increase) the CO2 emissions so it is not possible to determine the correct CO2 figure unless each and every motorhome sold (that has optional extras fitted) is tested by the dealer.

 

This is just not practical.

 

 

Deneb touches on how the CO2 emissions datum of a motor caravan might be defined in his 12 August 2019 9:54 PM posting In this earlier forum thread

 

https://forums.outandaboutlive.co.uk/forums/Motorhomes/Motorhome-Matters/Tax-changes/52822/

 

A motorhome model may have a choice of engine output and/or transmission type (manual, automatic, 4x4). There may be a wheel-diameter option that will result in the motorhome’s overall gearing altering significantly. Certain factory-fitted options (eg. non-integrated awnings, roof bars) will affect the motorhome’s aerodynamics. Any of these things may impact on a motorhome’s CO2 figure.

 

It was always acknowledged that calculation of the CO2 datum of motorhomes (particularly ‘coachbuilt’ motorhomes constructed on a multi-stage basis) would be potentially problematical. This was mentioned in the “Testing motorhome emissions” section of this January 2019 Out&AboutLive article:

 

https://www.outandaboutlive.co.uk/motorhomes/articles/practical-advice/motorhome-advice-motorhome-emissions

 

Realistically, it seems likely (to me) that ‘minor’ factory-fitted options (awnings, bike-racks, tow-bars, etc.) will be ignored and that, for coachbuilt motorhomes, the motorhome converter will define a model’s CO2 datum using a quite small set of calculation criteria.

 

Regarding how a vehicle’s ‘list price’ is defined (which will be important for the £40K price threshold) this is stated on Page 3 of this August 2016 document

 

http://dvla.dft.gov.uk/ved/ved-reform-briefing2.pdf

 

 

 

 

[Sydney1]

Don't forget that a no deal BREXIT is likely to add 10% WTO levy to the cost of imported cars and that's before factoring in the inevitable exchange rate movements on top. Motorhomes likely to be effected as well

[Don636]

Maybe this will encourage us to buy British.

[HymerVan]

Don636 - 2019-08-22 12:37 PM

 

Maybe this will encourage us to buy British.

 

Buying "British" is not an option in the sense that the base vehicle and many of the components are sourced from abroad (mainly Europe) so the closed we can get (I don't use the word "best") is a vehicle completed and assmbled in the UK.

[Sydney1]

Normally very patriotic but that does option does not fill me with glee in the future. Holding onto my Burstner :-)