A holiday park operator trading as British Holidays, Haven, and Butlins may have to pay increased fuel charges through its rental packages following a ruling in the Court of Appeal.
The long-running argument between HMRC and Colaingrove, which operates 37 holiday parks across the UK, was decided in the former’s favour, ending a period of reduced VAT on caravan- rental fuel supplies.
HMRC’s case was that legislation allowing for domestic VAT rates did not give any intention that the reductions could apply to rental caravans, emphasising the differences between rentals and privately-owned caravans; the former a serviced accommodation, the latter the use of a caravan pitch with optional electricity.
Counsel for HMRC suggested that the fact the treatment was different was ‘unsurprising’, as the two customers bought different things, with the caravanrental package combining electricity in its fixed-sum.
This includes a discount-price package advertised in the Sun, whose readers can book holidays in static caravans on the sites by paying an all-in-one fee for accommodation in the caravan and use of its facilities, including electricity.
While the implementation date and exact implications of this decision are unknown, as it stands, the ruling, if put in practice, would increase overall costs for operators that are currently paying the reduced VAT rate.