VAT on Holiday Caravans
In May 2012, HM Treasury announced a change to the treatment of VAT on holiday caravans from zero-rated to reduced-rated.
Currently, caravans that exceed either 7m in length or 2.55m in width are zero-rated as they are deemed to be designed for occupation all year round and therefore suitable as residential accommodation, even though many are used for holiday purposes.
From 6 April 2013, in addition to the ‘size’ test, only those caravans that conform to British Standard BS 3632:2005 will qualify for zero rating, as will second hand caravans which are occupied before 6 April 2013 and conform to earlier versions of BS 3632. Those caravans that exceed 7m in length or 2.55m in width but do not conform to BS 3632:2005, will be subject to VAT at 5%.
Please note the status of the site licence where the caravan is located does not affect the VAT treatment of the caravan under the new rules. This notion was originally suggested in a HM Revenue and Customs consultation document and has since caused some confusion.
Once again, it should be noted that removable contents will continue to attract VAT at the standard rate irrespective of whether the caravan itself is subject to VAT at the reduced rate or zero rate.
If you require any further information or assistance, please do not hesitate to contact Alan Taylor at the office.
Author: Alan Taylor FCCA
A former pupil at Ripley St Thomas C of E High School in Lancaster, Alan joined Scott & Wilkinson directly from school in 1994 and qualified as an Accountant in 2001. Alan is the Partner with responsibility for the day-to-day...
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