HMRC has withdrawn VAT concessions for caravan owners and boat builders because they don’t comply with EU law.
Caravan owners will no longer receive VAT concessions from 2012 because they conflict with European legislation, HMRC announced this week.
From 1 January 2012 caravan owners will no longer receive zero rated water and sewerage charges, and first time connection to utilities will now incur tax, where before they were zero rated.
“We recognise that caravan site owners may have to make adjustments and that caravan owners will now incur VAT on supplies that were previously zero rated or outside the scope of VAT. We will offer a 12 month period of notice before the concessionary treatment formally comes to an end,” said HMRC’s senior VAT adviser Mike McLachlan in a statement.
Commenting on the administrative burdens this would create for site owners and the additional costs for caravan owners, Simon Elliott from Bridge Leisure Parks told the Telegraph: “It’s something the industry and the holiday market could do without”.
Boat builders will also have VAT concessions withdrawn on boats brought to the UK by residents for use outside the EU. They will now be charged 20% VAT unless they are exported by the manufacturer.
Howard Pridding, executive director of the British Marine Federation, which represents boat manufacturers, commented: “We have had no communication from HRMC about this to date. Many boatbuilders have UK customers who wish to keep their boat outside of the EU and, as such, we will be looking closely at the impact this could have on the UK leisure marine industry and making appropriate representations to Government.”
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