UK Motorhome Tax: What You Should Know

If you’re thinking about changing your lifestyle to enjoy all the freedom that living in a motorhome allows, you must consider the taxes you will have to pay for your vehicle. The UK implemented changes to the Road Tax on April 1, 2020, and here is what you need to know.

What is VED for Motorhomes?

All types of road vehicles used on public roads in the UK are subjected to Vehicle Excise Duty (VED), also known as the Road Tax. You will have to pay VED when you buy a new motorhome or campervan, so pay attention to the following.

New vs. Secondhand

If you buy new, there’s a one-off VED payment and its value is determined by the vehicle’s fuel emissions. So, what does that mean for you?

The idea is to encourage people to choose cars or other types of vehicles that are more friendly to the environment. Naturally, those cars have low to zero CO2 emissions and are subject to the lowest tax rate. Diesel vehicles that meet the RDE2 standard come next, followed by cars that run on petrol and diesel vehicles that are not RDE2 compliant, for which you’ll pay the highest VED.

For the subsequent years, there’s a fixed road tax charge calculated by a method that uses the price you paid for your motorhome.

To find the best motorhomes with low emissions, check out Auto Finance Online for a wide range of models and great financing plans.

In case you choose to buy a used vehicle, you won’t have to pay the one-off VED, but you will need to pay the annual road tax charge.

Secondhand vehicles appear more efficient as far as taxes are concerned, but keep in mind a used motorhome might need refurbishing and you’re bound to need to take it to a mechanic more often, so you’re not saving any money really.

To find out exactly what taxes you’ll have to pay, check the government’s guide.

How did Brexit Save UK Caravan Owners Thousands of Pounds?

Nobody likes it when taxes go up, but things could have been a lot worse. In September 2019, the EU decided that campervans and motorhomes should not fall under the commercial vehicles’ tax but be considered as private cars.

That was a huge blow as taxes on mobile homes went up 700 percent. Fortunately, since March 2020, the UK government scrapped that provision and at present, all motorhomes in the UK are classified as commercial vehicles.

That is very good news for all the people thinking about buying a caravan or a motorhome. Besides, what you need to consider is that when you live in a traditional house you also must pay property taxes and council taxes, which are generally higher than an annual Road Tax.

What Other Costs Are There?

Other than VED and the annual Road Tax, what you pay for living in a caravan depends on the lifestyle you choose. If you drive from place to place you’ll obviously need to pay parking fees at the sites where you pitch your caravan, but in many places, these are as low as £5 per night, and that includes all the electricity you need for the duration of your stay.

As with all cars, you will also need to put something aside for servicing and maintenance of the vehicle.