VAT: maintaining the zero-rate for residential caravans
Published 1 December 2015
© Crown copyright 2015
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/vat-maintaining-the-zero-rate-for-residential-caravans/vat-maintaining-the-zero-rate-for-residential-caravans
Who is likely to be affected
Manufacturers, caravan distributors, caravan parks and anyone who sells caravans that are currently zero-rated.
General description of the measure
The VAT zero-rate for residential caravans is linked to the current British Standard (BS) for residential caravans (BS 3632:2005) published by the British Standards Institution. This BS has been revised following publication of a new 2015 version (BS 3632:2015). This change in legislation ensures the VAT zero-rate continues to apply to supplies of residential caravans built to the new BS and maintains the effect of the current zero-rate.
Policy objective
To ensure that residential caravans which are designed to be used for year round occupation, remain zero-rated following the introduction of a new BS.
Background to the measure
The sale of large static caravans has been zero-rated since the inception of VAT in 1973. From 6 April 2013, the zero-rate has been restricted to apply to sales of static caravans that exceed a specified size and which are manufactured to BS 3632:2005 approved by the British Standards Institution. This further restriction ensures that the zero-rate is restricted to sales of caravans that are designed and intended for year round residential use (residential caravans). BS 3632:2005 has now been updated and a revised version (BS 3632:2015) published on 30 November 2015. Group 9 to Schedule 8 of the VAT Act 1994 is being amended to ensure that sales of qualifying residential caravans that meet either BS 3632:2005 or BS 3632:2015 qualify for the zero-rate.
Detailed proposal
Operative date
1 December 2015.
Current law
The current legislation is in Group 9 of Schedule 8 to the VAT Act 1994.
Proposed revisions
Secondary legislation amends Group 9 to include supplies of caravans constructed to the new British Standard 3632:2015.
Summary of impacts
Exchequer impact (£m)
| 2015 to 2016 | 2016 to 2017 | 2017 to 2018 | 2018 to 2019 | 2019 to 2020 | 2020 to 2021 | |
|---|---|---|---|---|---|---|
| Impact | Nil | Nil | Nil | Nil | Nil | Nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any significant economic impacts.
Impact on individuals, households and families
There is no impact on individuals, households or families. The measure simply retains the scope and coverage of an existing VAT zero-rate.
Equalities impacts
This measure does not have any impact on equalities.
Impact on business including civil society organisations
This measure is expected to have no impact on businesses and civil society organisations. The changes simply retain the scope and coverage of the existing zero-rate.
Operational impact (£m) (HM Revenue and Customs (HMRC) or other)
It is not anticipated that implementing this change will incur any additional costs/savings for HMRC.
Other impacts
This measure does not have any other identified impacts.
Monitoring and evaluation
This policy will be kept under review through communication with taxpayer groups affected by the measure.
Further advice
If you have any questions about this change, please contact Irene Frost on Telephone: 03000 585 848 or email: irene.frost@hmrc.gsi.gov.uk.
Declaration
David Gauke MP, Financial Secretary to the Treasury has read this tax information and impact note and is satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impacts of the measure.