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Revenue & Customs Brief 37/11 issues reminder
HMRC have reminded owners of caravan site owners that three extra-statutory concessions relating to their businesses are to be withdrawn with effect from 1 January 2012. The move will result in changes to certain VAT treatments:
- Recharges of business rates will follow the VAT liability of the pitch fee (standard-rated in the case of holiday/leisure sites).
- Recharges of water/sewerage costs that are not metered to the individual customer at their pitch will follow the VAT liability of the pitch fee (generally standard rated in the case of holiday/leisure sites, exempt in the case of residential sites).
- One-off charges for the first-time connection to gas, electricity, water and sewerage will follow the liability of the pitch (exempt or standard rated) unless the site owner identifies and charges for individual consumption (that is, through metering to the individual pitch), in which case the charge will follow the liability of the utility (reduced rated for electricity and gas, zero-rated for water and sewerage).
Revenue & Customs Brief 37/11 clarifies the effect of the timing of invoices and payments and, for example, how to determine the VAT treatment when charges are made in 2011 that relate to services provided in 2012.
