Caravans and VAT
Like hairdresser’s chairs, caravans take up a disproportionate amount of VAT case law. The main issues centre on whether the supply is of a caravan (potentially zero-rated) or standard rated holiday accommodation or the difference in the liabilities between the supply of the caravan itself and other supplies linked (electricity hook ups, removable internal goods etc.). The removable goods issue resulted in one supply for VAT purposes but at different rates of VAT.
A recent case involved the supply by a business of caravans along with a long term lease for occupying a site. The lease was provided by a third party (usually a local authority). HMRC said that the supply was of exempt accommodation (not holiday accommodation as there was no restriction on occupation). The Upper Tribunal said that the supply of a caravan without a lease (which was supplied by a third party) could not be of accommodation but only the caravan itself and therefore was zero-rated.