VAT on RVs and 7m+ Motorhomes

Discussion in 'Full Timers' started by John & Joan, Jul 30, 2011.

  1. John & Joan

    John & Joan Funster

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    I have just been looking at the HM Customs and Excise website VAT notices and noticed this


    Motor homes and motor caravans

    Motor homes and motor caravans aren't considered to be cars for VAT purposes so long as certain features have been incorporated into the vehicle. These are:

    • a permanently installed sink and cooking facilities
      • seating arrangements so that diners can sit at the meal table
        • at least one bed which has a minimum length of 1.82 metres
          • a permanently installed fresh water tank with a minimum capacity of ten litres
    These features have been agreed between HMRC and the Society of Motor Manufacturers and Traders.
    • HMRC Reference:Notice 701/20 (February 2004)
    • 2. The VAT treatment of caravans

    • 2.1 What is a caravan?

      The term caravan is not defined in the VAT legislation. In practice we adhere to the definition of a caravan, as set out in The Caravan Sites and Control of Development Act 1960 and The Caravans Sites Act 1968.


      These define a caravan as being:


      ‘any structure designed or adapted for human habitation that is capable of being moved from one place to another (whether being towed or by being transported on a motor vehicle so designed or adapted).’ (1960 Act)
      and, if a twin unit caravan
      ‘is composed of not more than two sections separately constructed and designed to be assembled on site by means of bolts, clamps or other devices’ (1968 Act)
    • For a caravan to be regarded as designed for human habitation it must have the attributes of a dwelling, that is, it must consist of self-contained living accommodation. It would need to have washing facilities and the means to prepare food (such as kitchens and bathrooms).
      We see the term caravan as including mobile homes, residentials, statics etc.
      The liability of a caravan depends upon its size (see paragraph 2.2).

    • 2.2 What is the liability of the supply of a caravan?

      For any one making supplies of caravans it is necessary to establish whether or not VAT is chargeable.
    The supply will be standard-rated unless the caravan is either:


    • more than 7.0 metres long; or
    • more than 2.3 metres wide
    in which case it is zero-rated. Note that these measurements exclude towing bars and any similar apparatus used solely for the purpose of attaching the caravan to a vehicle.

    An RV or Motorhome falls under the description of a caravan for VAT purposes. Have you paid VAT on a RV or Motorhome that falls into the above dimensions?
     
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  2. Johns_Cross_Motorhomes

    Johns_Cross_Motorhomes Trader - Motorhome & Accessory Sales

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    Nice one BUT any motor vehicle is Vatable, end of story and an RV or a van over 7m is still a self propelled vehicle with an engine.

    I think you will find that they are referring to 'statics' whilst wheeled, have no engine are used for purely residential purposes and are therefore zero rated like a new house.

    Peter
     
  3. pappajohn

    pappajohn Funster Life Member

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    i agree.....

    some confusion over caravans......the law recently changed to allow a caravan/trailer over 2.3mtrs wide (Hobby, Munsterland etc) to be towed by a none commercial vehicle (under 3500kg)....but such a caravan would now be vat rated, under 2.3mtr wide is vat free.
     
  4. Johns_Cross_Motorhomes

    Johns_Cross_Motorhomes Trader - Motorhome & Accessory Sales

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    No caravan is VAT free!:cry::cry: only maybe a static caravan type

    Peter
     
  5. pappajohn

    pappajohn Funster Life Member

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    i bow to your wisdom Peter, probably just trailers.
     
  6. Johns_Cross_Motorhomes

    Johns_Cross_Motorhomes Trader - Motorhome & Accessory Sales

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    John

    Nothing in this country is VAT free, we even pay 20% to wipe our backsides, even condoms are Vatable.

    Whatever you do the leeches and bloodsuckers tax you, you pay insurance tax, departure tax, income tax on your pension, you name it, the only thing not taxed is the benefits for the layabouts who do sweet fanny adams.

    Peter
     
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  7. John & Joan

    John & Joan Funster

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    The definition of a caravan in the Caravan Sites and Control of Development Act 1960 is as follows:

    "caravan" means any structure designed or adapted for
    human habitation which is capable of being moved
    from one place to another (whether by being towed, or
    by being transported on a motor vehicle or trailer) and
    any motor vehicle so designed or adapted,

    So by that definition. A Motor Caravan is a motor vehicle so designed or adapted for human habitation. It is therefor a Caravan. The VAT regulation states that they follow this definition.

    The VAT regulations also state that a Motor Caravan is not a Motor Car as far as VAT is concerned.. It is a self propelled Caravan. This has been agreed by HMCR (VAT) and The Society of Motor Manufacturers and Traders. Neither is it a commercial vehicle unless adapted to also carry good ie a Dual Purpose vehicle. http://www.hmrc.gov.uk/vat/sectors/motors/what-is-car.htm#4

    The VAT notice also states "We see the term caravan as including mobile homes, residentials, statics etc."
    The etc. must therefor cover Motor Caravans if they are using the definition of a caravan in the 1960 Act.

    It is not the first time that VAT has been found to be wrongly applied Peter. There are many items that are Zero rated for VAT. http://www.hmrc.gov.uk/vat/forms-rates/rates/goods-services.htm see VAT notice 701/20 http://customs.hmrc.gov.uk/channels...ertyType=document&columns=1&id=HMCE_CL_000101

    Therefor if a Motor Caravan is over 7 metres in lenght or over 2.55 meters (8ft 4ins) wide it should be VAT exempt.
     
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  8. normanandsue

    normanandsue Funster

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    Nice try John - but sadly I think John Cross is right.
    Even if you are right John HMRC will quickly issue a notice to make them Vatable.


    Norman
     
  9. slobadoberbob

    slobadoberbob Read Only Funster

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    yep that is right

    when they allowed the bigger size to be made they removed the vat exemption so now they also have to pay the vat on the caravan .. motorhomes all have some form of vat.

    Bob:Eeek:
     
  10. slobadoberbob

    slobadoberbob Read Only Funster

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    sorry wrong John


    HMRC have changed that rule a while back. it was changed when the wider caravan was allowed to be built in the UK .. it was vat exempted.. now it is not..

    As any RV owner will confirm we have to pay VAT on RV's (motorhommes) over 7 mtrs..
     
  11. John & Joan

    John & Joan Funster

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    I agree the regulation has changed for width the first notice I quoted was 2.3 meters (7ft 6 ins) the new one I loaded this morning states 2.55 metres (8ft 4 ins) wide. However the lenght still remains at 7 metres.

    The VAT man will not say to a supplier you have charged the wrong amount of VAT unless it is lower than it should be. They state it is up to the supplier to ensure they charge the correct amount of VAT on any transaction. HMRC issue VAT notices and you are supposed to read and apply them.

    Because you have had to pay the VAT to your supplier, it does not necessarily mean that the correct rate has been charged.
     
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  12. scotjimland

    scotjimland Funster Life Member

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    I think we need a 'test case' to settle this one..

    who will volunteer .. The ringleader is supplying the funds .. :Rofl1::Rofl1:
     
  13. John & Joan

    John & Joan Funster

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    Thank you

    Your information has been forwarded on to the relevant department at HM Revenue & Customs.

    I await their reply.
     
  14. Oldroadies

    Oldroadies Read Only Funster

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    Unless you live in the Channel Islands:thumb::Rofl1::Rofl1::Rofl1:





    But our leeches are growing and charge 5%VAT equivalent - on everything - even food!!!:Sad:
     
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  15. wkdtroll

    wkdtroll Read Only Funster

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    Ha ha ha ha - you'll have a bl**dy long wait then!!:Rofl1::Rofl1::Rofl1:

    I imported a new motorhome from Germany 5 years ago and the b*stards even made me pay VAT on the delivery from Italy (where it was manufactured) to Germany - how does that work then?
     
  16. johnp10

    johnp10 Funster

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    VAT on the transport operation is payable.
    At the Italian rate and to the Italian VAT man, I think.
     
  17. motorhomelover

    motorhomelover

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    be assured if there is any money in it the tax man will have his share
    just another ripoff Brittan
     
  18. GJH

    GJH Funster Life Member

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    Hang on a minute. If VAT is at the [HI]Italian[/HI] rate and to the [HI]Italian[/HI] VAT man, how is that rip off Britain? :BigGrin:
     
  19. John & Joan

    John & Joan Funster

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    No they replied quickly but simply repeated the same info. They are stating they use the definition of a caravan as in the Caravan Sites and Control of Development Act 1960 ammended in 1968. However they then go on to say that they do not consider a Motorhome or Winebago as a Caravan.

    They said if I had a specific case to contact them. The will not communicate on a what if situation.

    So if someone has just or is intending to purchase a Motorhome of 7 metres or more then it is up to you to see if you can claim the VAT back.

    I replied that the information in the VAT leaflet is misleading and they either do use the 1960 Act definition and "Vehicles designed or adapted for human habitation" are a caravan as in that act, or they state that they use their own definition which excludes motor vehicles.

    I have not recieved a reply from them.

    On your other point

    VAT is charged to the end user. If VAT is applied to stages between initial supply and end user The people along the line claim the VAT back on their inputs (Purchases) and recharge VAT on the output (Sales) which includes any added value applied (ie profit margins etc.).
    There should only be one VAT charge to the end user and that is curently 20% of the price being asked by the supplier.
    A person who is not VAT registered cannot claim back the VAT on goods they purchase in the same manner they cannot charge VAT either on goods they supply to others.

    How this works across borders in Europe I do not know. I assume if the German company cannot claim back the VAT on the goods from Italy then it becomes part of their purchase price and they then have to add VAT to that price, plus profits etc. when they supply it to the end user or another dealer. That dealer would then apply VAT for the country where the supply took place. In theory Value Added Tax is only a tax on the added value of any goods supplied.
     
  20. motorhomelover

    motorhomelover

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    MY benifits are taxable
    I am disabled not all on benifts ara as you so unjustly describe as benefits for the layabouts who do sweet fanny adams.

    as an ex-employer of over 30 men/women over a 20year period i have paid many thousands of pounds in VAT, PAYE Emploers contributions to PAYE and pensions seeing many families prosper and able to buy their own homes

    i wonder just how much you contribute to our over stretched system
    I for one would not spend a penny with your company if that is the way you put forward your point of view

    yours the layabout !!!
     
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