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HMRC internal manual

Capital Allowances Manual

HM Revenue & Customs
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Plant and Machinery Allowances (PMA): buildings and structures: caravans


A caravan is plant if it does not occupy a fixed site and is regularly moved as part of normal trade usage, even if it is only moved from its summer site to winter quarters.

Accept that a caravan, which is provided mainly for holiday lettings on a holiday caravan site, is plant whether it is moved or not. Caravans occupying residential sites do not qualify for capital allowances. As far as a holiday caravan site is concerned, treat anything that is treated as a caravan for the purposes of:

  1. the Caravan Sites and Control of Development Act 1960 (c. 62) (‘CSCDA’), or
  2. the Caravans Act (Northern Ireland) 1963 (c. 17 (N.I.)),


as a caravan. Those acts give caravan a wider meaning than its normal one. In them, caravan covers double units delivered in two sections and then joined together and wooden lodges provided these are moveable. But it does not cover structures that are not moveable, even if these are otherwise identical.

This wider definition in Section 23 reflects what was previously ESCB50. It only applies to caravans on holiday caravan sites. For sites in Great Britain, that means a site licensed by the local authority under the CSCDA as a holiday caravan site. It does not include a holiday camp, leisure park, hotel or conference centre.

In the 1950s an agreement was made with the National Caravan Council. It applies to trades that consist of hiring out caravans or the provision of caravan sites and covers what capital expenditure qualifies or does not qualify as expenditure on plant or machinery.

Under the agreement expenditure incurred on:

  • water supplies (that is mains or other apparatus used to convey water to or around sites - and hot water systems)
  • electricity supplies (that is heavy cables, distributive wiring and general electrical apparatus, and diesel generating apparatus)
  • sanitary fittings, baths and wash basins


qualifies for plant or machinery allowances.

Under the agreement no allowances are due for expenditure on:

  • roads
  • proposed sites for individual caravans
  • buildings erected as sanitary blocks
  • sewage and drainage pipes installed as public health requirements.


You should only apply the agreement if the taxpayer asks for it to be applied. The taxpayer must accept the disallowances as well as the allowances for the agreement to be applied.

Give plant or machinery allowances on a caravan provided by a farmer to house a farm employee even if it occupies a fixed site and is used solely for residential purposes. This treatment applies only to farmers. It does not apply to any other cases.