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HMRC internal manual

VAT Government and Public Bodies

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HM Revenue & Customs
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Other local authority activities: miscellaneous (F to M): gypsy and traveller sites

Local authorities have no statutory duty to provide permanent or transit sites for gypsies or travellers. But sites can still be provided by county councils under powers in the Caravan Sites and Control of Development Act 1960. Any charge made for the use of a site is exempt as the provision of residential accommodation.

Section 175(2)(b) of the Housing Act 1996 places responsibilities for housing the homeless with a district council, as opposed to a county council. This extends to those with accommodation that consists of a moveable structure, vehicle or vessel designed or adapted for human habitation. They are homeless if they do not have somewhere to both place the accommodation and reside in it. Consequently if someone uses a site under housing legislation obligations any charges made by the local authority are non-business.

Section 101 of the Local Government Act 1972 permits a local authority to arrange for the discharge of its functions by another local authority. So a county council can enter into an agreement for a district council to manage a site on its behalf and contribute to the expenses. There also appears to be encouragement from the Department for Communities and Local Government (DCLG) for local authorities to transfer the management of their sites to the private sector. The provision of these management services is standard rated.

It is not unusual for a district council to lease a site to its county council and, at the same time, enter into an agreement to manage the site for the county. The county council makes an exempt supply of spaces on the site and the district council provides standard-rated management services. The lease is exempt, unless it is for a peppercorn rent in which case it is non-business.