Author: Star Lead Generation

If you’re paying for something it’s nice to know exactly what it is you’re paying for, and holiday caravans are no exception to this rule. Recent taxation reforms in relation to VAT have caused some confusion in the static caravan world.

What tax rate applies to static caravan sales? What about site fees? Should I be paying council tax? These are all questions which require definitive answers; definitive answers that aren’t always easy to find. We aim to provide them.

Static Caravan Sales

Right now, the tax rate on static caravan sales is 0%. However, this is set to change. After much political wrangling this summer, the static caravan industry and the government were finally able to agree on a negotiated tax rate of 5% applied to static caravan sales. This rate will come into force in April 2013.

The government had originally announced plans to apply the standard VAT rate of 20% to sales of static caravans, starting in October 2012. However, these plans were met with outrage by representatives of the static caravan manufacturing industry, who claimed that the proposed rate of tax would cripple business and severely damage sales.

Caravan manufacturers projected that this jump in tax would result in a 30% dip in profits as well as a loss of 1,000 jobs in the manufacturing sector alone. They vowed to fight the tax increase every step of the way, eventually succeeding in reducing the increase to just a quarter of what was proposed, as well as delaying it by six months to give the industry time to adjust.

Site Fees

Site fees are nice and easy. You pay a standard rate of 20% VAT on site fees. However, the VAT rates on the water, sewerage and utility bills that affect your pitch make things slightly more complex.

If the water supply and sewerage services to the pitch are individually metered then you will pay no VAT at all on either service. If the services are delivered to you via a central source, shared by the rest of the caravan site and not metered individually, then you will pay standard VAT rates on the charges.

If your caravan is used as a holiday home and individually metered, VAT on utilities such as gas and electricity will be charged at 5%; if these utilities are not individually metered the VAT will be charged at the current standard rate of 20%.

Council Tax

Working out the council tax on your holiday caravan is similarly straightforward. Council tax does not apply to your static caravan if you use it simply as a holiday home.

Hopefully this guide has helped you answer any tricky questions you may have had relating to VAT and taxation on your holiday caravan.

A static caravan holiday home is your property, in the same way that your home is. While you are likely to – and, in fact, encouraged to – remove all valuable items from the unit when you vacate the caravan, prevention of theft and trespass will still be high up you list of priorities.

By taking a few basic precautions, you can greatly improve the security of your holiday caravan, both when it is and when it is not in use.

Security Locks

Locks are an integral part of the security of your caravan. The most common forms of caravan lock are ellipse turn clamp locks and cube locks. The former use a central cylinder, into which a key is inserted to turn the locking mechanism, while the latter takes the form of a sliding block.

Whichever lock you choose, ensure that they are fitted to all points of entry on your caravan, and that they are all engaged when you vacate the unit for any length of time. Never leave a spare key hidden anywhere on your plot; it simply isn’t worth the risk. It’s a far better idea to simply carry a second key.

You may also want to have a security chain fitted to your caravan. This screws directly into the back of the caravan door and provides an extra level of security when you need to answer your caravan door to an unknown caller.

Security Alarms

It may seem somewhat extreme, but having alarms fitted to your caravan is relatively easy and inexpensive when compared to the benefit they can bring.

The easiest way to alarm your caravan is to attach motion sensors to all external doors and windows. When armed, these devices will sound should anyone attempt to gain access to the caravan unit. Don’t worry about leaving them visible in the window; this merely increases the deterrent. The ideal scenario is for the would-be trespasser to be put off and not attempt to access the caravan at all.

Many parks operate a more sophisticated radio alarm system. Attempting to enter the caravan unit while this alarm system is armed will result in the park’s central control room being alerted, ensuring that your caravan remains secure.

To enquire about whether your park operates such a system, simply visit your park manager.

Basic Practices

As mentioned in the first paragraph, removing all valuables from your unit is advisable when you leave your static caravan unit, but this isn’t always possible, particularly when you’re only popping out for the day or a couple of hours.

Instead, make sure that no valuables are left near windows or in full view from the outside. Such items are like a red flag to would-be thieves, and these kinds of temptation can be easily avoided.

If you do need to leave valuables in your caravan, investing in a safe unit and then hiding it from view is one way to add an extra level of security to your caravan. Marking items with a UV pen is another way of ensuring that items can be easily identified and recovered in the event that the worst does happen and they are stolen.

Our final piece of advice is to always ensure that your insurance policy is fully up to date.

One of the most frequently asked questions we receive deals with the amount of revenue an owner can generated from renting out or subletting their static caravan holiday home.

A large number of UK owners choose to rent their van to subsidise the cost of ownership using the income to help towards costs such as site fees and insurance. Very few owners in the UK buy static caravans to make a profit.

This is a very difficult question to answer as the amount of rental income you will generate depends on a number of criteria unique to each different owner.

A key issue that will determine the amount of rental income will be related to the time you, family and friends wish to use your static caravan holiday home. For example those who wish to use their static during peak season holidays such as Easter, Summer School Holidays and October half term will derive much less rental income than those who sublet for these periods. They however may be making substantial savings on the cost of their holidays compared to renting directly for the holiday park at normal rates.

Before purchasing a static caravan holiday home a buyer should be clear on their priorities of lifestyle benefits verse cost of ownership.

Purchase Price & Specification

Initial purchase cost is a key factor when considering the role of rental income in your ownership plan.

Obviously a larger the static caravan e.g. 6 berth rather than 4 berth will have a higher purchase price but will offer larger rental incomes. The same is true when it comes to specification of the static caravan.

Always remember to include finance payments in your calculations if you are purchasing the static caravan on credit.

Marketing, Reservations & Maintenance

It is also important to consider how you intend to market your static caravan and deal with maintenance and cleaning requirements.

If you rent out your static caravan you will also need to ensure all legal requirements for subletting are fulfilled e.g. annual gas testing.

Many larger parks will offer inclusive rental schemes that will take care of bookings and maintenance requirements. These programmes offer convenience and time saving but will reduce actual income as a result of the commission or fees charged.

Some owners choose to coordinate such arrangements themselves to save money, excepting that they will have to invest time into dealing marketing, bookings, sub contractors or even completing cleaning themselves if they live locally.

Whilst increased rental time will in turn increase rental revenue it is also important to consider wear and tear costs on your static caravan. We have received feedback from owners that have reported that some people on holiday do not treat the static caravan with the same respect as the owner and have suffered increased maintenance bills and the stress of having damage to their much loved holiday home. Remember if you do not handle the bookings yourself you have no control over who uses your holiday home. It is generally considered that increased rental time will increase annual running costs due to higher maintenance costs and this should be considered in your calculations.