Commentary

RCB/37/11 VAT—reminder of forthcoming withdrawal of three Extra Statutory Concessions relating to caravan sites

Part V16 Forms and other HMRC material

RCB/37/11 VAT—reminder of forthcoming withdrawal of three Extra Statutory Concessions relating to caravan sites

RCB/37/11 VAT—reminder of forthcoming withdrawal of three Extra Statutory Concessions relating to caravan sites

Revenue & Customs Brief, Issue 37. 25 October 2011

This Brief is for caravan site owners.

Background

On 13 December 2010, HM Revenue & Customs (HMRC) announced its intention to withdraw three Extra Statutory Concessions relating to caravan sites with effect from 1 January 2012 (see http://www.hmrc.gov.uk/menus/extra-stat-con-tn.pdf “Withdrawal of extra statutory concessions”), which will result in changes to the VAT treatment of—

  1.  

    —     recharges of business rates at holiday/leisure caravan sites

  2.  

    —     recharges of non-metered water/sewerage rates at caravan sites

  3.  

    —     one off charges for the first time connection to gas, electricity, water and sewerage.

The purpose of this Brief is to remind caravan site owners and their customers about the forthcoming changes and to clarify the effect of the timing of invoices and payments on whether the concessions apply.

Reason for withdrawal

The House of Lords' decision in the Wilkinson case (R v HM Commissioners of Inland Revenue ex p Wilkinson [2005] UKHL 30) clarified the scope of HMRC's administrative discretion to make concessions that depart from the strict statutory position. HMRC has been reviewing its concessions in light of this decision. Although it is likely that the majority can remain as they are, some are thought to be beyond the scope of HMRC's discretion. Of these, some can be legislated to preserve their effect, others will need to be withdrawn.

After taking legal advice, HMRC has concluded that the three concessions that are subject of this Brief are beyond the scope

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