Government make U-turn on Static Caravan Tax: New rate of 5% not 20%

VAT dropped to 5%

The Government have made a dramatic U-turn on their plans to introduce VAT on static caravans at 20%.

Under a new proposal static caravans, which are currently exempt from VAT, will now have a VAT rate of 5% which will come in to force in April 2013 rather than October this year.

The fantastic news comes as a result of pressure from Leisuredays and its customers, The National Caravan Council (NCC), The British Holiday & Home Parks Association (BH&HPA) and a petition signed by thousands of static caravan owners.

Chris Nettleton, Director at Leisuredays, had this to say,

“We’ve been completely against the government’s plan to bring in VAT for static caravans at the standard rate of 20%, from October 2012 – and whilst the industry hasn’t succeeded in stopping the plans altogether we think it is an excellent result to force the government in to adopting a new rate of 5%, delayed until April 2013.”

We estimate almost 2000 of the 10800 signatures on the HM Government ePetition are those of Leisuredays customers so we’d like say a special thank you for their support.

Chris added,

“This new rate will have a much smaller impact on the price of a new caravan, will mean customers need to adjust their static caravan insurance ‘sums insured’ by only 5%, and will lessen the detrimental affect on the industry as a whole.”

It’s an issue which we know static caravan owners and our customers feel very strongly about, especially after our original blog post on the plans to bring in VAT on statics received over 50 responses.

 

16 comments on “Government make U-turn on Static Caravan Tax: New rate of 5% not 20%

  1. i have just recieved my rates bill for the coming year for my caravan which is sited in scotland .is it correct that 20%vat applies to this ….i thought that the amount had been changed to 5% or does this only apply to the sale of caravans ..

  2. I have my caravan on a site on the isle of cumbrae and have received notice that 20% vat. has been added to my £250 00 amenities fee this year making the bill now £300.00. would you advise me on whesther this is correct.

  3. Hi guys,

    site fees have always been subject to VAT, so yes £250 plus 20% VAT equals £300.

    The government were proposing to bring in 20% VAT for static caravans being purchased (the rate was previously 0%). However they have made something of a U-turn and will now only raise the VAT to 5%, starting from April next 2013.

    Site fees are completely seperate to this and are not affected.

    I hope that clears things up.

    best regards

    Neil
    Leisuredays

  4. Why when selling your sites caravan do you have to pay the park 20% on the commission that you have to pay to them?

  5. A 20% increase was a great concern. I think it would have put many buyers off, whereas 5% should not have such a big impact, if any at all

  6. Mr Hodges,

    we answered the question regarding VAT on site fees above, is there something else you had a question about that we missed?

    The new VAT rate only affects the cost of buying a new static caravan. 5% VAT will now be charged whereas it was previously 0%.

    It is our understanding that site fees, rates, and anything else are all unaffected

    Thanks,

    Neil
    Leisuredays

  7. Hi

    I think you have misunderstood the question.. Owners have been sent there yearly rates bill which is seperate from site fees. The bills have increased by 20% with the reason being given that VAT has been added for the first time. Hence everyone bills has risen by 20% unless the owner are trying to mislead us and has raised the basic rate by 20% and then blaming the Government

  8. Hi guys,

    Your site fees and yearly rates bills have always been VATable at the standard VAT rate. The standard rate is currently 20%.

    If the price of your fees has gone up by 20% this year then there may be other reasons for this such as increased running costs incurred or to reflect improvements made by your park. As far as VAT is concerned the rate for fees has not changed, it has only changed on the sale of static caravans.

    We’ll help wherever we can but site fees and rates bills are something which is best discussed with your site operator.

    thanks,

    Neil
    Leisuredays

  9. Thanks

    Will clarify from council regarding increase in rate(but (residential is frozen) and VAT. Site fees are paid seperately from counci tax bill at a different time of year. This sounds very suscipious as reason for increase if specific to VAT rate of 20% relately to council tax and is obviously occuring at more than one site

    Fiona

    Fiona

  10. My site have added 20% to our council tax rates, stating this is due to the goverment VAT changes

  11. All our fees (rates, water, sewage) are now subject to 20% vat. This is because HMRC have ruled that the site owners, who are vat registered, pay these charges (at no vat of course!) then charge on to us, the owners. As it’s something they invoice, then they must add 20% vat. What a rip-off !!

  12. Hi have sold my holiday home and they say I will have to pay 20percent vat on the sale is this right

    1. Hi Fred,

      The static caravan industry and the government last summer agreed on a negotiated tax rate of 5% applied to static caravan sales. This rate came into force in April 2013.

      The government had originally announced plans to apply the standard VAT rate of 20% to sales of static caravans, starting in October 2012 but these plans were met with outrage.

      I suggest you speak to your park operator to be sure.
      Thanks

      Lucie
      Leisuredays

  13. Do I pay 20% VAT on the sale of my static home as well as the 15% commission to the site owner?

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