Chapter IHTM25279
| Published date | 20 March 2016 |
| Record Number | IHTM25279 |
| Court | HM Revenue & Customs |
| Issuer | HM Revenue & Customs |
Caravan sites may present more problems in view of the variety of facilities provided. They may range from land on which to park caravans with minimal utilities laid on, up to a full-scale holiday camp where the recreational and social facilities are of primary importance and the accommodation is only secondary.
A number of caravan site cases have now been heard by the Courts and Tribunals, the most recent of which, Executors of Stedman v IRC, was eventually decided in the Court of Appeal as IRC v George (2003) EWCA 1763. This case was preceded into the Chancery Division by Weston (Executor of Weston deceased) v CIR (2000) STC 1064.
Furness v IRC (1999) SpC 202
Although the caravan site in this case was licensed primarily for static vans, caravan rallies also took place in summer and a high level of service was provided for those using the site. More importantly, the static caravans were owned by the residents who had to buy them from the partnership, could not sublet them and had to sell them back to the partnership.
The net profit from the sales exceeded the net profit from the renting of pitches and evidence was given that the proprietor had spent 80% of his time on activities not connected with caravan sales. The business was not comparable to that of a landlord owning a block of flats. Business relief was available.
Weston (Executor of Weston deceased) v CIR (2000) STC 1064,
In this case the photographic evidence submitted to Lawrence Collins J reminded him of a suburban housing estate in miniature. The mobile homes did not have the appearance of caravans. They looked much more like small bungalows. It was found from standing back and looking at the matter in the round that the pitch fees were not ancillary to the caravan sales but that if anything the opposite applied. The business was one which consisted mainly of holding investments and business relief was not available.
IRC v George (2003) EWCA 1763
Although the Weston approach was approved by the High Court in George, that decision was overturned in the Court of Appeal, which found in the taxpayers’ favour.
The Court of Appeal rejected the legalistic approach adopted in the High Court on the strength of Weston in favour of the more general overview adopted in Farmer v IRC (1999) STC (SCD) 321. This involved looking at the business in the round and deciding whether the holding of property as investment was the main component of the business. If it was not, then the business was entitled to...
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