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Touring caravan storage income- rental income or trading income?

Touring caravan storage income- rental income...

How should income from storage of touring caravans be treated.

The caravans are parked in a field and just taken out for holidays etc.The keys are held by the operator of the storage site and given to the caravan owner when he collects the caravan.

An annual fee is paid to store the caravan in the field.

Can it be trading income or is it rental income?

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01st Mar 2012 12:43

Trading income

Personally I would treat it as trading income as they are storage fees and not technically rental fees.

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01st Mar 2012 12:56

It's property income

Income is assessable as property income if it arises through the "generating of income from land".

"Generating income from land means exploiting an estate, interest or right over land as a source of rents or other receipts". S.266 ITTOIA 2005.

Unless your client is providing some additional service, such as the provision of effective security arrangements or cleaning the caravans, etc. then there's nothing there that amounts to a trade and it's property income.

Interestingly though, for VAT purposes it is more likely than not that it is a standard-rated supply.

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sugar
01st Mar 2012 13:49

Would this change if they were in a warehouse?

George, would your opinion change if the caravans were stored in a warehouse? the reason i ask is i have been approached by a potential client who stores caravans outside in a field and in a warehouse and so was just wondering?

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01st Mar 2012 14:21

Not necessarily

To be trading income, the income must be a trade.  A trade involves a degree of activity.

If all that's being done is letting people in, telling where to poke (did I say poke? I mean park) their caravan, letting them out and then letting them in and out again when they collect their caravan.  I can't see an activity that amounts to a trade.  You're just letting them use your space.

If caravan owner drops of the caravan in a yard outside and you park it in the warehouse, packing them in more tightly and moving them around from time to time so that you can get at the ones where the caravan owner's coming back on a known date, then that might amount to a trade.

If you employ security guards to patrol the premises, or you provide any services additional to the mere use of space, it may well make it a trade.

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