As previously discussed in our blog , from 6 April 2013 the rules applying to the VAT charged on the supply of caravans is changing. From 6 April 2013 the VAT liability payable on the supply of a new caravan will depend on whether or not that caravan is classed as:
- Standard rated (20%): A caravan is standard rated if it less than 7 metres long and 2.55 metres wide.
- Reduced rated (5%): A caravan is reduced rated if it is more than 7 metres long or 2.55 metres wide and is not manufactured to BS 3632:2005 standard (as explained below).
- Zero rated. (0%): A caravan is zero rated if it is more than 7 metres in length or 2.55 metres in width and is manufactured to BS 3632:2005 standard.
The amount of VAT payable on a caravan sale will therefore depend on its size and the standard to which it is manufactured. The BS3632:2005 standard is the standard that is approved by the British Standards Institution in respect of residential caravans. Essentially it ensures that a caravan is manufactured to a standard which allows it to be occupied year round for residential purposes i.e. it complies with health and safety standards etc.
Second hand sales
The VAT position alters however if you are selling a ‘second hand caravan’. This is because if a caravan is longer than 7 metres or wider than 2.55 metres, meets BS3632:2005 standard (or an earlier standard) and was occupied prior to 6 April 2013 it will be zero rated. It will therefore be important for park owners to keep records in respect of the caravans on the park if they are to qualify to be zero rated after April 2013 and represent a VAT saving for park owners.
Note that any removable contents sold with the caravan (e.g. carpets, curtains and furniture) will remain standard rated.
The above regime applies to the sale of caravans, second hand or new, that complete after 6 April 2013.
At Blacks, our Leisure and Licensing Department can assist with all types of enquiries in