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Caravanners face higher VAT charges

07-Nov-2011

Caravan site owners face a backlash from customers who will have to pay increased maintenance fees after HMRC came into line with EU law, say accountants.

The general opinion is that price rises will be ‘inevitable’ when a series of concessions in respect of VAT come to an end on 1 January 2012.

Under the change, non-metered water and sewerage charges, the recharge of business rates and first-time connection to utilities will attract the 20% standard VAT rate. As a result, caravan site businesses are expected to balance the books by increasing their charges to holidaymakers and private owners.

Many caravan owners who are resident on caravan sites for part of the year may not be aware of the changes.

The industry has seen a flurry of interest in the changeover from people who have bought caravans as second homes and let them out as holiday accommodation. People in this position seem to often not be aware of the new VAT rules because site owners have not informed them.

HMRC said in a recent briefing note: ‘EU law does not permit the UK to introduce new legislation to preserve the effect of these concessions; therefore they need to be withdrawn.’


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