Guidance

Buying and selling houseboats and caravans using the VAT margin scheme

If you sell second-hand houseboats or caravans in the UK, find out how to use a margin scheme to account for VAT.

• From: HM Revenue & Customs
• Published: 23 December 2021
• Last updated: 2 November 2026
  Show all updates

  1. 2 November 2026

     Guidance from withdrawn VAT notice, The Margin and Global Accounting Scheme (VAT Notice 718), has been added.

  2. 23 December 2021

     First published.

There are special rules to calculate the VAT on standard-rated removable contents, if you sell zero-rated or reduced-rated houseboats and caravans under a margin scheme.

When you can use a margin scheme

You can use a margin scheme if you sell:

• second-hand boats, houseboats and caravans which do not meet the criteria for zero-rating
• standard-rated fixtures or removable contents from a second-hand caravan or houseboat which is zero-rated

Read about the zero rating of caravans and houseboats and valuing their contents in Caravans and houseboats (VAT notice 701/20).

Rules for selling standard-rated removable contents with zero-rated caravans and houseboats

There are rules if you sell the following together under a margin scheme:

• standard-rated fixtures or removable contents
• zero-rated houseboat or caravan under a margin scheme

If you opt to use the margin scheme, you need to account for VAT on the sale of the:

• reduced-rated houseboat or caravan (where applicable)
• standard-rated fixtures or removable contents

You must calculate the value of the standard-rated element.

The value of the standard-rated removable contents should be 10% of the tax-exclusive selling price of the complete caravan. HMRC has agreed this with both the:

• National Caravan Council Ltd
• British Holiday and Home Parks Association Ltd

How to work out the margin and VAT due

You should calculate the margin on the supply of the caravan or houseboat by using how to work out the margin and VAT due using VAT margin schemes.

Ways to calculate the value of standard rated fixtures or removable contents

To work out the value of removable contents and standard-rated fixtures read section 8 of VAT notice 701/20.

You can either calculate the:

• actual values
• standard apportionment of values

If using the standard apportionment method, the 10% apportionment is applied to the margin. This arrives at the standard-rated element to calculate the VAT. 

If you use another method, it must produce a fair and reasonable result. 

Records to keep

You should keep the normal VAT margin scheme records.

You should also keep copies of your calculations to support the values used for each transaction.

VAT returns

You must show any goods you buy or sell using a margin scheme on your VAT return.