We are not VAT specialists! Nor can we advise! But we have been told that the government notice 701/20 is a good indication of how VAT is levied on caravans. We hope you find this useful….


This notice cancels and replaces Notice 701/20 (April 2012).

1. Overview

1.1 This notice

This notice gives information on:

  • how supplies of caravans should be treated for VAT purposes (section 2and 3
  • the treatment of various services of a type normally supplied by owners of caravan sites, or other people making related supplies to the owners of caravans or caravan sites (sections 4 to 6)
  • how you should treat supplies of houseboats including accommodation and the provision of other services connected to the supplies
  • how to treat removable contents in new or second-hand zero-rated caravans and houseboats

1.2 Changes to this notice

This notice has been updated and revised. The main changes are as follows:

  • the VAT liability of caravans changed with effect from 6 April 2013 in accordance with the 2012 Budget announcements
  • paragraph 2.2 has been updated to outline those changes – further information is available in VAT information sheet 04/13

1.3 Who should read this notice

This notice is for anyone who:

  • is involved in the manufacture or sale of caravans and houseboats
  • is a caravan site owner
  • provides accommodation in caravans and houseboats, or mooring facilities for houseboats

1.4 The law

This notice covers the following areas of the VAT Act 1994:

  • the conditions under which the supply of caravans and houseboats are zero-rated are set out in Schedule 8, Group 9
  • removable contents of caravans and houseboats are precluded from zero rating unless they’re of a type mentioned in Schedule 8, Group 5, Item 4
  • the treatment of pitches for caravans and moorings for houseboats is covered by Schedule 9, Group 1 – depending upon the circumstances these can either be exempt or taxable at the standard rate

2. The VAT treatment of caravans

2.1 Definition of a caravan

The term ‘caravan’ is not defined in the VAT legislation. In practice we base our interpretation on the definitions in the Caravan Sites and Control of Development Act 1960 and the Caravans Sites Act 1968.

A caravan is a structure that:

  • is designed or adapted for human habitation
  • when assembled, is physically capable of being moved from one place to another (whether by being towed or by being transported on a motor vehicle so designed or adapted)
  • is no more than:
    • 20 metres long (exclusive of any drawbar)
    • 6.8 metres wide
    • 3.05 metres high (measured internally from the floor at the lowest level to the ceiling at the highest level)

A ‘twin unit’ caravan can fall within this definition if composed of no more than 2 sections designed to be assembled on site by means of bolts, clamps and other devices, as long as, once assembled, it’s physically capable of being moved from one place to another.

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 (often known as residential park homes), static caravans (often called caravan holiday homes or lodges), but not motor caravans (often called motor homes).

A structure that fails to meet the conditions may constitute a building for planning purposes, in which case, the first sale or long lease of it may qualify for the zero rate of VAT under the conditions described in Notice 708: buildings and construction.

The VAT liability of a caravan depends on its size.

2.2 Liability of the supply of a caravan

This paragraph should be read in conjunction with VAT information sheet 04/13.

For anyone making supplies of new caravans on or after 6 April 2013 it’s necessary to establish whether or not VAT is chargeable.

The supply will be:

  • standard-rated if it does not exceed either 7 metres in length or 2.55 metres in width
  • reduced-rated if it exceeds either 7 metres in length or 2.55 metres in width and it’s not manufactured to BS3632:2005
  • zero-rated if it was sold on or after 6 April 2013 and it exceeds either 7 metres in length or 2.55 metres in width and it’s manufactured to BS3632:2005

For anyone making supplies of second hand caravans on or after 6 April 2013 the VAT liability follows the previous bullet points unless:

  • the caravan exceeds either 7 metres in length or 2.55 metres in width
  • was occupied before 6 April 2013
  • meets BS3632:2005 or an earlier version of that standard
  • all 3 of these bullet points apply – the sale of a second-hand caravan will be 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.

2.3 Supply of a caravan

You’re supplying a caravan if you do any of the following:

  • sell it
  • lease it under a long term leasing agreement under which the lessee is free to transport it to a park or other place of their own choosing
  • loan it without making a charge
  • divert it to your own personal use

3. Other supplies associated with caravans

3.1 How to treat fixtures, fittings and removable contents

Where zero rating applies to a caravan, it also includes those goods which a builder would ordinarily incorporate into a new house or flat. Other fixtures and removable contents supplied with the caravan are standard-rated. Examples of goods falling into these 2 different liabilities are as follows:

  • zero-rated goods:
    • sinks
    • baths
    • WCs
    • fixed partitions
    • water heaters
  • standard-rated goods:
    • tables
    • chairs
    • matresses
    • seat cushions
    • fridges
    • carpets
    • washing machines

The examples listed are not exhaustive.

You will find more about this distinction in Notice 708: buildings and construction, it explains how to calculate the tax due on removable contents.