Are RVs and 7 metre+ motorhome exempt from VAT

John and Joan

Well-Known Member
I have just been looking at the HM Customs and Excise website VAT notices and noticed this
Motor homes and motor caravans
Motor homes and motor caravans aren't considered to be cars for VAT purposes so long as certain features have been incorporated into the vehicle. These are:
  • a permanently installed sink and cooking facilities
    • seating arrangements so that diners can sit at the meal table
      • at least one bed which has a minimum length of 1.82 metres
        • a permanently installed fresh water tank with a minimum capacity of ten litres
      • These features have been agreed between HMRC and the Society of Motor Manufacturers and Traders.
        HMRC Reference:Notice 701/20 (February 2004)
        2. The VAT treatment of caravans
        2.1 What is a caravan?

        The term caravan is not defined in the VAT legislation. In practice we adhere to the definition of a caravan, as set out in The Caravan Sites and Control of Development Act 1960 and The Caravans Sites Act 1968.


        These define a caravan as being:


        ‘any structure designed or adapted for human habitation that is capable of being moved from one place to another (whether being towed or by being transported on a motor vehicle so designed or adapted).’ (1960 Act)
        and, if a twin unit caravan
        ‘is composed of not more than two sections separately constructed and designed to be assembled on site by means of bolts, clamps or other devices’ (1968 Act)
        For a caravan to be regarded as designed for human habitation it must have the attributes of a dwelling, that is, it must consist of self-contained living accommodation. It would need to have washing facilities and the means to prepare food (such as kitchens and bathrooms).
        We see the term caravan as including mobile homes, residentials, statics etc.
        The liability of a caravan depends upon its size (see paragraph 2.2).
        2.2 What is the liability of the supply of a caravan?

        For any one making supplies of caravans it is necessary to establish whether or not VAT is chargeable.
        The supply will be standard-rated unless the caravan is either:
        more than 7.0 metres long; or
        more than 2.3 metres wide
        in which case it is zero-rated. Note that these measurements exclude towing bars and any similar apparatus used solely for the purpose of attaching the caravan to a vehicle.
        An RV or Motorhome falls under the description of a caravan for VAT purposes. Have you paid VAT on a RV or Motorhome that falls into the above dimensions
 

John and Joan

Well-Known Member
I have sent my question to HMRC and have had an acknowledgement email. The email says they will be in-touch with a reply within 15 days.
 

sundowners

Well-Known Member
Hi
I am pretty sure you are correct------I was told it's a van/ caravan that you can live in (like 5ers)
But people DO live in cars (not comfortably);)
 

John and Joan

Well-Known Member
HMRC replied "HMRC do not see the term caravan to include motorhomes or Winnebago's for VAT purposes. The term caravan is not defined in VAT legislation, so we use the definition given in 'the Caravan Sites and Control of development act 1960'."
This again is contradictory information so I have sent another email to the effect they either do uses the definition or their statement in the VAT notice is wrong.
The definition in the 1960 Act does include Motor vehicles designed or adapted for Human Habitation.
However if they insist that Motorhomes are not caravans then we have a Government department saying that Motorhomes are not caravans so restrictions applying to caravans should then not be applied to Motorhomes. In another notice they also state that they are not cars either.
 

John and Joan

Well-Known Member
HMRC replied "HMRC do not see the term caravan to include motorhomes or Winnebago's for VAT purposes. The term caravan is not defined in VAT legislation, so we use the definition given in 'the Caravan Sites and Control of development act 1960'."
This again is contradictory information so I have sent another email to the effect they either do uses the definition or their statement in the VAT notice is wrong.
The definition in the 1960 Act does include Motor vehicles designed or adapted for Human Habitation.
However if they insist that Motorhomes are not caravans then we have a Government department saying that Motorhomes are not caravans so restrictions applying to caravans should then not be applied to Motorhomes. In another notice they also state that they are not cars either.
 

John and Joan

Well-Known Member
HMRC replied "HMRC do not see the term caravan to include motorhomes or Winnebago's for VAT purposes. The term caravan is not defined in VAT legislation, so we use the definition given in 'the Caravan Sites and Control of development act 1960'."
This again is contradictory information so I have sent another email to the effect they either do uses the definition or their statement in the VAT notice is wrong.
The definition in the 1960 Act does include Motor vehicles designed or adapted for Human Habitation.
However if they insist that Motorhomes are not caravans then we have a Government department saying that Motorhomes are not caravans so restrictions applying to caravans should then not be applied to Motorhomes. In another notice they also state that they are not cars either.
 

vwalan

Well-Known Member
john. certainly the eu dont see m,homes as caravans . thats how the spanish goverment fell foul of the rules . i think you will find the caravan act can be reevoked ig you push hard enough. i keep getting told that eu rule over powers national law.that doesnt always seem to work but on speaking to various departments they try to miss inform us but very often back down in the end. certainly when i had a garage we had to treat m,homes as cars for vat purposes . the vat is payed just like cars . its not seen like when you buy a commercial. but is charged on the differance between the buying price and the selling price. as a customer you may never know what vat is payed on your purchase . its not reclaimable.
cheers alan.
 

John and Joan

Well-Known Member
Hi Alan
VAT Notice http://www.hmrc.gov.uk/vat/sectors/motors/what-is-car.htm#4
Motor homes and motor caravans

Motor homes and motor caravans aren't considered to be cars for VAT purposes so long as certain features have been incorporated into the vehicle. These are:
  • a permanently installed sink and cooking facilities
  • seating arrangements so that diners can sit at the meal table
  • at least one bed which has a minimum length of 1.82 metres
  • a permanently installed fresh water tank with a minimum capacity of ten litres
These features have been agreed between HMRC and the Society of Motor Manufacturers and Traders.
In addition, the following are not cars for VAT purposes:
  • vehicles capable of accommodating only one person or suitable for carrying twelve or more people including the driver
  • caravans, ambulances and prison vans
  • vehicles of three tonnes or more unladen weight
  • special purpose vehicles, such as ice cream vans, mobile shops, hearses, bullion vans, and breakdown and recovery vehicles
  • vehicles with a payload of one tonne or more
HMRC state that They follow the definition of a caravan in the Caravan Sites and Control of Development Act 1960 which is "caravan" means any structure designed or adapted for
human habitation which is capable of being moved
from one place to another (whether by being towed, or
by being transported on a motor vehicle or trailer) and
any motor vehicle so designed or adapted,
They are saying they use this definition but not the last bit "and any motor vehicle so designed or adapted", so restricting the definition to towed or transported.
It is my contention that they either follow the definition as in the 1960 Act or their VAT Notice is wrong and is misleading.
 

vwalan

Well-Known Member
been awhile since i had the garage . wasnt quite so stroppy then . we used to just treat them as cars . at the moment you still dont have to have a sink to be a m,home. years ago you had to have the water thats why many fitted a tap but no sink. now if you get a definition it doesnt even mention water. well the last one i had doesnt. there is a few pics on dft web sites about what is or isnt a m,home but that doesnt follow any guide lines. there is a bit of agro going on . they have for a while been trying to say if you dont have windows in the back its not a m,home but that doesnt follow the definitions either . argue with them they back down. havent argued with the vat man . we just did what they said it was easier then.
but interesting thread .
there is alot of talk about the speed limiters tacho.s etc that goods vehicles must have . at the moment campers get left out. it could change as they do carry goods . your goods . the rules talk about goods or burden of any discription. talking with vosa and dvla last week they do agree that we need a hgv licence to drive a vehicle over 7,500kg . because they can class a camper of that weight as carrying goods yours. even the over 3,500kg requires more than a car licence now . you can sometimes use one definition to try to follow other rules but all the authorityies use there own . authority gone mad. you could be stirring a hornets nest.
 

johnnerontheroad

Active Member
I have been shown an invoice for a mobile home (static caravan) This showed that the caravan was zero rated and certain fixtures are standard rated for vat. The fixtures only came to £2000 on a £25000 caravan so not much vat paid.

So if this is applied to a motorhome would the vat be on the base vehicle and not on the conversion, but also on some fixtures such as carpets and curtains? The reason this was show to me was because the accountants for who I work had questioned that the vat should not be charged on the fixtures and that all the mobile home should be zero rated, they are now contacting HMRC for their oppinion. I will try and keep you informed of their reply.

I take it that you have heard nothing from HMRC John.

Dave
 

John and Joan

Well-Known Member
Hi Dave

I had an email from them stating that they used the definition of a caravan as used in the Caravan Sites and Control of Development Act 1960 and 1968.

They however then stated that Motor Caravans and RVs were not in there opinion caravans.
The definition in the 1960 Act is a "caravan" means any structure designed or adapted for human habitation which is capable of being moved from one place to another (whether by being towed, or by being transported on a motor vehicle or trailer) and any motor vehicle so designed or adapted.

They are saying they use this definition but not the last bit. ie. They are saying "capable of being moved from one place to another (whether by being towed, or by being transported on a motor vehicle or trailer so designed or adapted), so missing out the bit "and any motor vehicle"and moving the closing bracket " )" from the definition so giving it a completly different connotation.

They also said the did not deal with "what if" speculation and I would need a definite case to proceed. I would either have to have recently have purchased a Motorcaravan over 7 metres that I had paid VAT on or be about to complete such a deal.

I have just had a major crash on my old computer and I am still trying to recover data from the hard disk in that machine so I am unable to copy the email to here.
 

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