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Residential caravan sites & utilities

31st Jan 2023
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I came across this issue arising due to the increases in utility bills. A small sized residential caravan park was not registered for VAT. Its pitch fees are exempt; utilities re-charged were below £85k, so the owners had not registered for VAT. With utility bills increasing, the value of re-charged bills exceeded £85k in a twelve-month period. Should he register for VAT?

The answer, of course, is ‘Yes.’

I would expect the supplies of pitch fees and utilities to be distinct supplies, subject to separate VAT rates. It will be difficult, although not impossible, I think for an owner to argue a single supply of exempt pitch fees including utilities.

I would expect meters to be provided for each pitch, so gas and electricity is re-charged to each pitch occupier. The reduced rate of VAT will apply.
Of course, the actual circumstances may be quite different!

Do speak with your caravan site owners to check.

HMRC guidance notice is here: www.gov.uk/guidance/vat-treatment-of-caravans-and-houseboats-notice-70120#section4

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