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Posted Thu, 24 Sep 2020 15:57:10 GMT by Batman1999
HMRC's guidance in VAT Notice 709/3 simply refers to the new temporary reduce rate applying to "seasonal pitches" but what do they mean by a seasonal pitch? HMRC doesn't define what they mean by a seasonal pitch and from online caravan parks and the Caravan Club website it appears that the common understanding of a seasonal pitch is a temporary pitch for a specified period of time of less then a year, usually the holiday season, and provides for caravan users to only have to tow their van once to the site, park up and not have to take their caravan away again until the end of the season. Based on that, then an annual charge covering a full year for a static caravans on non-residential caravan parks, which some parks refer to as ground rent, site fee or some other term, could not be considered a charge for a 'seasonal pitch' and therefore would appear not to qualify for the temporary 5% VAT rate. Any online articles I've referred to to get advice simply refer to 'pitches' but no-one ever defines exactly what they mean by the word 'pitch' - is it restricted to payment for a pitch on a holiday park on which someone sites their caravan for less than a year and removes the caravan at the end of the 'season' or does it extend to include an annual payment for a pitch on a holiday site on which a static caravan stands all year round? Can anyone throw any light on it and refer to any of HMRC's guidance that confirms this one way or the other?
Posted Wed, 30 Sep 2020 10:45:41 GMT by HMRC Admin 8
Hello,

Please refer to section 4 of VAT Notice 701/20 ‘Caravans and houseboats’.

This establishes that, broadly speaking, the intention of the law is to exempt pitches for caravans used as principal private residence.

The table in paragraph 4.1 will help you determine the liability of supplies of caravan pitches.

The temporary 5% reduced rate of VAT for seasonal pitches for caravans (including supplies of facilities provided in relation to the occupation of the pitches) only applies to those supplies that would otherwise be standard-rated per the guidance in paragraph 4.1.

Supplies associated with caravan pitches

Regards,

Posted Thu, 01 Oct 2020 09:03:09 GMT by Batman1999
Thank you for your reply. I had previously referred to the guidance at section 4.1 of VAT Notice 701/20 and recognise that the the supply of a 'pitch' on a residential site remains exempt from VAT and the temporary 5% VAT rate applies to supplies of pitches that are taxable. The issue I am struggling with, and maybe I didn't explain it well enough before, is that while it is clear that the temporary 5% VAT rate only applies where a pitch is taxable, HMRC's guidance in VAT Notice 709/3 and in the guidance they issued at introduction of the temporary reduced rating refers to 'seasonal pitches' but goes no further to define what they mean by the term 'seasonal pitch'. The fact that, in the guidance issued or updated in regard to the temporary reduced rate, HMRC have specifically used the word 'seasonal' when referring to a caravan pitch and having remained silent on or have excluded any reference to an annual fee (even if that fee may be described as a pitch fee) suggests that HMRC consider a 'seasonal' pitch fee and an 'annual' fee that may be described as a pitch fee as something different. So the very crux of my query is: Does an annual fee, that may be described as a pitch fee or ground rent or some similar terminology and that is charged to the owner of a static caravan for siting it on a 'pitch' at holiday park site (not a residential park) fall within the temporary VAT rate reduction in the same way as a 'seasonal' pitch fee clearly would? Thanks
Posted Mon, 05 Oct 2020 11:12:58 GMT by HMRC Admin 8
Hello,

In VAT notice 701/20 section 5.2 may give more information with regards to seasonal pitches it states:

The holiday season normally lasts from Easter to the end of September, but areas are not regarded as having a seasonal holiday trade if in practice it’s common for tourists or holiday goers to come and go at all times throughout the year.

This is likely to be the case, for example, in places of historical interest which attract tourists for reasons not dependent on good weather.

As previously advised the guidance states the temporary 5% reduced rate of VAT for seasonal pitches for caravans (including supplies of facilities provided in relation to the occupation of the pitches) only applies to those supplies that would otherwise be standard-rated per the guidance in paragraph 4.1.
Supplies associated with caravan pitches

Regards,
Posted Wed, 14 Oct 2020 09:23:36 GMT by Batman1999
Thank you for your latest reply to my query but having read it, I am worried that I am missing some cryptic answer to my question. You continue to refer me to section 4.1 of VAT Notice 701/20, stating that the reduced rating only applies to supplies that would otherwise be taxable. Caravan pitches on holiday parks are not covered by the exemption for land and are therefore taxable and so the reduced rate could apply to them but I then come back to my issue of HMRC using the word 'seasonal' when referring to pitches that the reduced rate applies to. In my experience, HMRC rely very much on the actual words used in their policy and guidance and so the fact that HMRC have used the word 'seasonal' implies that there is some importance to that word. In your latest reply, you have said that some holiday sites are not regarded as having seasonal holiday trade if they are open for holiday trade all year round whilst (paraphrasing) others may have seasonal holiday trade as they are only open for part of the year (their holiday season). I can therefore only interpret what you have said (without actually saying it) to mean one of two things. Either: 1. a holiday caravan site that is open all year round and is not regarded as having 'seasonal' holiday trade cannot apply the reduced rate to their annual pitch fee as that pitch fee is not regarded as 'seasonal'; or 2. the holiday season for a holiday caravan site that is open for trade all year round is the whole year and so an annual pitch fee is considered to be 'seasonal' for that site and so the reduced rate can apply to that annual pitch fee. Could you therefore please confirm which of the above is the correct interpretation of the guidance and your advice. I would say that if it is the latter, then it seems to me that the inclusion of the word 'seasonal' in the guidance issue by HMRC in regard to the application of the reduced rate to caravan pitches is both superfluous and confusing given that, in fact, the result would be that all caravan pitches on all holiday caravan sites would qualify for the reduced rate, irrespective of whether their 'season' was for a period shorter than a year or for a full year.
Posted Thu, 15 Oct 2020 16:49:30 GMT by HMRC Admin 10
Hi

To be able to go into this in further detail please submit your enquiry to our Written Enquires Team, providing full details of your query.

VAT: general enquiries

Thank you.

Regards.
Posted Thu, 19 Nov 2020 13:42:08 GMT by Stephy Dewar
Been reading this with interest as we have just had a proforma invoice for our static caravan site fees for 2021, due by Feb. 1st 2021. As a static caravan owner I would like to add my 'two-pennyworth' to this debate as there currently does not seem to be a valid answer. I would suggest that in most cases a static caravan is regarded as seasonal. We have two choices on our site: a 10 month pitch or a 50 week pitch. Now as much as I would love to enjoy my caravan all year or at Christmas, it just isn't possible. Even with double glazing and central heating the nights are far too cold to stay. Most people are exactly like me - it may sit there all year, but we can only viably use it between March (if mild) and November - again if mild. It is actually mainly used between May to October. Most people close up their 'vans by end of October/mid November- and that means doing a full drain-down making the 'van unusable until spring. Without a drain down the plumbing might burst and flood the static. It is actually very rare that someone uses it continually even during the season - and we always refer it as a season. Hope that clarifies a few issues.
Posted Fri, 20 Nov 2020 10:11:25 GMT by Trevor Steel
The phrase "seasonal pitches" comes directly from VAT law. The Value Added Tax Act 1994, schedule 9, group 1, notes 14 and 14A read: "(14) A seasonal pitch for a caravan is— (a) a pitch on a holiday site other than an employee pitch, or (b) a non-residential pitch on any other site. (14A) In this Note and in Note (14)— • “employee pitch” means a pitch occupied by an employee of the site operator as that person’s principal place of residence during the period of occupancy; • “holiday site” means a site or part of a site which is operated as a holiday or leisure site; • “non-residential pitch” means a pitch which— (a) is provided for less than a year, or (b) is provided for a year or more and is subject to an occupation restriction, and which is not intended to be used as the occupant’s principal place of residence during the period of occupancy; • “occupation restriction” means any covenant, statutory planning consent or similar permission, the terms of which prevent the person to whom the pitch is provided from occupying it by living in a caravan at all times throughout the period for which the pitch is provided.' https://www.legislation.gov.uk/ukpga/1994/23/schedule/9/part/II/chapter/1/paragraph/wrapper12n2 Schedule 9 Group 1 details of VAT exemptions on supplies of land, where "seasonal pitches" are listed as an exception to that VAT exemption (i.e. they are subject to VAT). I would be inclined to think that any pitch which isn't already exempt through being deemed "residential" is likely (under the definition above) to be considered seasonal and be covered by the temporary 5% rate - but it's worth reading the extract to make sure it applies. Understandably HMRC will be unable to give such a general view on an open forum without opportunity to study the detail of individual cases - hence their suggestion to contact the written enquiries team.

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