A company based in Abercarn which makes caravan park homes has said changes to VAT rules will have a detrimental effect on its business.
Stately Albion, which employs 180 and is Europe’s oldest park home manufacturer, has said the change will have a detrimental effect on its business with the potential of future job losses.
Static caravans and caravan park homes used for leisure are currently exempt from VAT, but from October 2012 the 20% charge will apply to them.
Adam Phillips, a buyer with Stately Albion said: “In 2013 we at Stately-Albion will be celebrating our 50th year of trading as a Limited company, through that time we have survived two major recessions, growing from strength to strength over the last few years.
“The Government’s proposal to apply 20% VAT to a proportion of our business will have a detrimental effect on Stately-Albion, the future of the caravan industry, and therefore jobs in traditional British manufacturing.
“The Government’s own estimate is a 30% drop in demand for leisure homes. It will affect our industry as a whole as companies will build more residential homes than leisure. The VAT increase will affect 30% of our overall business.”
Mr Phillips, who is the third generation to be involved in the family business, said the VAT increase could have an effect on jobs.
He said: “Unfortunately, the number of homes we build is directly proportionate to the number of people we employ.”
Islwyn MP Chris Evans has backed the firm in its opposition to the VAT hike.
He said: “This is a tax on leisure holidays at a time when Visit Wales is heavily promoting domestic tourism. Not only does this tax hike do nothing to encourage holidaying at home, it also targets a manufacturing success story.
“The Government talks about manufacturing being the key to rebalancing our economy while hitting the industry with this devastating rise.
“Instead of promoting jobs and growth this tax hike will put thousands of jobs and businesses across the country at risk.”
The Treasury has been asked to comment.