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HM Revenue and Customs Brief 05/12


HM Revenue and Customs -Tax Authorities

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Issued 27 February 2012

Purpose of this Brief

The purpose of this Brief is to introduce new guidance on the VAT liability of caravan pitch rentals, which reflects minor amendments effective from 1 March 2012.


This Brief is for caravan site owners.

Action required

Caravan site owners who currently supply exempt pitches in the circumstances described below (see 'Who will be affected…..?') should check their VAT liability under the new guidance.


This Brief introduces new guidance on the VAT liability of caravan pitch rentals. This new guidance reflects minor amendments that will take effect from 1 March 2012 as a result of legislation to put an existing concession on a formal basis (background information about the legislation can be found in the consultation document published on 13 December 2010 and the Summary of Responses to that document - the latter contains a link to the consultation document at the bottom of page 3).

There should be no change for the majority of caravan site owners. However, sites that currently supply exempt pitches in the circumstances described below (see 'Who will be affected….?') should check their position under the new guidance.

Who will be affected by the minor amendments?

You should review the VAT liability of your supplies if you currently treat caravan pitch fees as exempt in any of the following circumstances:

  • the pitches are provided for less than a year
  • the pitches are subject to an occupation restriction (such as a planning term stating 'no caravan shall be lived in during February') which prevents them from being lived on at all times throughout the period for which the pitches are provided
  • the pitches are on a holiday/leisure site

With effect from 1 March 2012, the criteria for treating your pitch fees as exempt will be stricter to ensure that only residential pitches qualify for exemption. Please see the new guidance below for details.

New guidance with effect from 1 March 2012

The guidance below is to replace paragraph 4.1 of Notice 701/20:

'What is the liability of a caravan pitch?

Pitch fees or rents received for the granting of the right to caravan owners to keep their caravans on pitches are either exempt or standard-rated. Broadly speaking, the intention of the law is to exempt pitches for caravans used as principal private residences.

The following table will help you to decide the liability of your supply. Words highlighted in bold are defined in the 'Notes' section at the bottom of the table.

Standard rated Exempt

The provision of pitches:
a) on holiday/leisure sites, regardless of how they are used, except for those pitches occupied by employees of site operators as their principal private residences
b) for restricted occupancy periods, except in the circumstances described in '(c)' to the right.

The provision of pitches:
a) on permanent residential sites where caravans can be lived in at all times throughout the year
b) on sites for Travellers where the caravans are used as principal private residences
c) for restricted occupancy periods, but only if
• the site is not advertised or held out for holiday/leisure use, and
• the pitch is intended to be used as the occupant's principal private residence

d) any type of site (including holiday/leisure sites) if the pitch is occupied by a warden or other employee of the site operator as his or her principal private residence.

Notes and definitions
1) In determining whether a site is a 'holiday/leisure site', HM Revenue & Customs (HMRC) will have regard to the way that the site is held out/advertised. In most cases, it will be clear from advertising material if a site is operated for holiday/leisure purposes.
2) A pitch is for a 'restricted occupancy period' if it is either provided for less than a year or is subject to an occupancy restriction.
3) An 'occupancy restriction' is any covenant (for example, agreement or term in a contract), statutory planning consent, site licence or similar permission, the terms of which prevent the person to whom the pitch is provided from occupying it by living in a caravan at all times throughout the period for which the pitch is provided (such as a condition that says 'no caravan shall be lived in during February').
4) In the case of mixed use sites:
• any references above to 'holiday/leisure sites' include holiday/leisure parts of mixed use sites
• any references to 'permanent residential sites' include permanent residential parts of mixed use sites
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5) HMRC will accept that a caravan is intended for use as a principal private residence if the site owner holds evidence such as, proof of listing on the Valuation Office Agency's (Opens new window) council tax register, evidence that the occupier has received housing benefit to help with the pitch fee, or agreements or contracts that indicate that the caravan is intended to be used as the occupant's principal home. input box

Pitch agreements impose certain obligations upon site owners such as the construction of pitches, bases and the park infrastructure. If you raise a one-off charge which is directly related to these obligations it will follow the liability of the supply of the pitch.

The input tax that is attributable to these supplies should be determined accordingly. For information about input tax attribution, see Notice 706 Partial exemption.'

New Notice 701/20 to be published shortly

The new guidance reproduced above will be incorporated into a revised version of Notice 701/20 Caravans and houseboats in due course.

About the Author

© Crown Copyright 2012.

A licence is needed to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs.

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Article Published/Sorted/Amended on Scopulus 2012-02-29 11:17:15 in Tax Articles

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