Supplies of removable contents in new and used caravans and houseboats

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Supplies of removable contents in new and used caravans and houseboats
  • New caravans and houseboats
  • Used caravans and houseboats
  • Using the second hand margin scheme
  • Including other charges in the sale price

This guidance note covers the VAT treatment of the supply of removable contents in conjunction with the supply of new and used zero-rated caravans and houseboats. This note should be read in conjunction with the Supplies of caravans and Supplies of houseboats guidance notes.

VATA 1994, Sch 8, Group 5, item 4 and Sch 8, Group 9, item 1; Talacre Beach Caravan Sales Ltd v Customs and Excise Comrs [2004] STC 817 (subscription sensitive); De Voil Indirect Tax service V4.275 (subscription sensitive); Notice 701/20 ; VATLP21500

The supply of removable contents with caravans and houseboats is liable to VAT at the standard rate unless they are ordinarily installed by a builder as fixture and fittings. Please see the Supplies of building materials guidance note.

Therefore if a supplier includes standard rated removable contents with the supply of the new caravan / houseboat, it will be necessary to apportion the VAT charged between the zero-rated supply of the caravan / houseboat and any standard rated removable contents.

Examples of acceptable apportionment methods are outlined below. These can be used by the supplier to apportion the value of the supply between the zero-rated and standard rated elements.

Please note that businesses are not required to use the methods described below. It can elect to use an alternative method, providing it produces a fair and reasonable result. It would be prudent for the business to obtain agreement from HMRC that it is an acceptable method before implementing it.

New caravans and houseboats

A business can use a cost based method to determine the value of the removable content in the caravan / houseboat. The following provides an example of how this method works in practice.

When the dealer or business buys the caravan the VAT will be calculated as follows:

When the dealer re-sells the caravan the

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