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VAT refund on annual fees for Static Caravans


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Hi Folks

 

This is my first post on this forum and I hope that its implications will benefit a fair proportion of the members on here.

 

I have read through the postings here regarding the possibility of a refund of VAT due to the Governments temporary reduction of VAT from 20% to 5% effective from 15th July 2020 and having extensively researched the matter and sought professional advice and interpretations literally to the highest level I understand that the majority of us, on the balance of probabilities, are entitled to such a rebate.  (please note that at present I am only concerned about period from July 15th 2020 up to 31st December 2020. 

 

The assertations and opinions on the matter of the Press, Martin Lewis and indeed the BH & HPA that basically the Park owners can do what they want with the reduced and subsequent rebated VAT are at best not necessarily correct and realistically inaccurate.

 

The problem is that the operators are straight batting the matter because with 350,000 static owners at around £300 per plot we are talking enormous amounts

 

I am in the process of disputing matters with one of the major Park operators and would ask you to watch this space over the next couple of months for developments and will report accordingly.

 

Regards and stay safe

 

VATMAN

 

 

Edited by VATMAN
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Basically if you agreed a flat fee for the pitch then even if the site operator can claim a reduction from 20 to5% you have agreed the fee level and it is up to the site operator to decide if they will return anything. Most of these sites have had to close for much of the season and many are not finding things easy. That VAT return may be the difference between survival and liquidation and at best turn a very bad year into something a little better. On that basis I doubt that they are going to be going to be that generous.

My understanding though is that VAT is payable at the rate in force when the contract is agreed, so if you paid any time up to the reduction, 20% applies, and if you paid after that then 5% applies to the whole period. No idea who gave you the advice but it is contrary everything I have seen.

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there is always the possibility that the smaller sites may be flat rate VAT, which (as far as I can make out from the Gov website) means that they charge you 20% but only pay 14.5%.?

And it seems that even with the 20% if the billing was in advance, they will already have paid this to the VAT man and have to wait until the end of the tax year for the refund.

On the Gov website it did read as if the intention was to encourage trade because they could reduce costs to the end user - and I understand that many Parks are indeed refunding the extra VAT element.

Quote:

Impact on individuals

This measure is expected to have a positive impact on individuals who go out for meals, buy hot takeaway food, stay in hotels or other holiday accommodation or visit the types of attractions outlined above. This measure temporarily reduces VAT charged on these supplies from 20% to 5%. Customer experience is expected to improve accordingly. It will also support tourism in these sectors.

End Quote.

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I would not be pushing too much for the vat reduction for the 20th July 2020 to 12th January 2021 and getting a refund for just that period. It is better to stick to the bills paid before then which paid the full amount but for the 2021 season to pay that bill at the reduced 5% rate and therefore get a full years reduction. This is what happened to us. The 2020 bill was paid early 2020 at 20% and the 2021 bill notice has already arrived but billed at 5% - so overall a larger saving.

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We’ve had our VAT refunded already, round about £300. 

Its not in cash but our account has been credited and it will be used by us to pay for our gas cylinders or towards our site fees, etc.

Happy with that.

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There are a lot of varying opinions on this matter as can be seen from the responses so far, but let me categorically assure all those that think  that no return of VAT is due to us fee payers that not only have I got written evidence from very credible sources to the contrary, but that there are a couple of more angles to the matter that at this stage I will not divulge.

 

As I have said above, please bear with me as in the not too distant future I will have a 100% definitive answer for you all.

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I always thought that VAT was charged at the rate applicable on the day the invoice was raised (or could be the date of payment), so I would be surprised if a bill paid in say March this year would be adjusted, as the VAT will have already been paid to HMRC. As a Touring caravanner we are finding that some sites have reduced the rate of VAT (eg CMC sites), but many private sites haven’t. The latter is somewhat disappointing, but ultimately I’m not paying any more for my pitch than I originally expected and the business is recouping some of their losses.

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On 20/11/2020 at 12:38, Paul1957 said:

I would not be pushing too much for the vat reduction for the 20th July 2020 to 12th January 2021 and getting a refund for just that period. It is better to stick to the bills paid before then which paid the full amount but for the 2021 season to pay that bill at the reduced 5% rate and therefore get a full years reduction. This is what happened to us. The 2020 bill was paid early 2020 at 20% and the 2021 bill notice has already arrived but billed at 5% - so overall a larger saving.

If that were the case then there would be no problem whatsoever but our Park owners along with many others have simply upped the net amount and dropped the VAT rate for 2021 theoretically leaving the gross fees unchanged.

 

The implications of that is that on the face of it, it leaves us poor site fee payers with the possibility and knowing the greed of the owners probability, that future fees when VAT reverts to 20% (or higher) will mean we all suffer punitive increases!!

 

Vaguely and Paul1957 would it be possible that you can tell me who your park operators are either on here on Direct messaging me.

 

Thanking you in advance

 

Regards

 

Edited by VATMAN
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It appears your site may be ripping you off. The static we use is on a Camping and Caravanning Club site. The fees have been increased for 2021 but only by inflation which happens every year but for 2021 the VAT is at the reduced rate.

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No, I’m not prepared to tell you who our site owners are.

It’s a family owned site and they’re very fair and approachable so I don’t want to rock the boat for them or us. I can’t see any advantage to them or us,  you know knowing who they are 🤷‍♀️

 

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3 hours ago, VATMAN said:

If that were the case then there would be no problem whatsoever but our Park owners along with many others have simply upped the net amount and dropped the VAT rate for 2021 theoretically leaving the gross fees unchanged.

 

Which they are perfectly entitled to do, if they so wish.

 

See here, from Moore and Smalley:

 

In a measure to encourage people to support the beleaguered leisure, tourism and hospitality sector, the Chancellor Rishi Sunak has announced a temporary VAT rate of 5% which will apply to food and non-alcoholic drinks from restaurants, pubs, bars, cafés and to hot take-away food. The measure also applies to supplies of accommodation and admission to attractions across the UK. The reduced rate came into effect from today, Wednesday 15 July, and will continue until 12 January 2021.

Do I have to pass on the VAT rate reduction to the customer?

This is the most common question asked by our clients.  The simple answer for most hospitality and leisure businesses is no, you do not have to, as most businesses in these sectors  advertise their services at the price they are sold to the customer, a price which will include VAT if any is payable to HMRC.

You may consider using the reduction in the VAT rate as an opportunity to reduce your prices if you feel you are operating in a price competitive market. However, where the market price for your products remains unchanged this could perhaps be seen as a temporary way of retaining a larger element of the margin and repairing your businesses finances.

Common sense isn't a gift, it's a punishment because you have to deal with everyone who doesn't have it.  :rolleyes:

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40 minutes ago, Silversurf said:

 

Which they are perfectly entitled to do, if they so wish.

 

See here, from Moore and Smalley:

 

In a measure to encourage people to support the beleaguered leisure, tourism and hospitality sector, the Chancellor Rishi Sunak has announced a temporary VAT rate of 5% which will apply to food and non-alcoholic drinks from restaurants, pubs, bars, cafés and to hot take-away food. The measure also applies to supplies of accommodation and admission to attractions across the UK. The reduced rate came into effect from today, Wednesday 15 July, and will continue until 12 January 2021.

Do I have to pass on the VAT rate reduction to the customer?

This is the most common question asked by our clients.  The simple answer for most hospitality and leisure businesses is no, you do not have to, as most businesses in these sectors  advertise their services at the price they are sold to the customer, a price which will include VAT if any is payable to HMRC.

You may consider using the reduction in the VAT rate as an opportunity to reduce your prices if you feel you are operating in a price competitive market. However, where the market price for your products remains unchanged this could perhaps be seen as a temporary way of retaining a larger element of the margin and repairing your businesses finances.

The article loses any credibility when it says "The simple answer"  There simply is not a simple answer!! 

 

Have a look yourself at HMRC's rules and seek the advice of VAT Specialists and Tax Lawyers and you will realise on the balance of probabilities, the interpretations of Moore and Smalley are incorrect.

 

The Temporary reduction in VAT was introduced to stimulate the Hospitality Industry and not to inflate the balance sheets of greedy Park Owners who have suffered no loss whatsoever because they have received their fees annually in advance and have enjoyed Business rate reliefs, Government grants and have benefitted from furloughing staff.

 

Also it is worth noting that there are more issues to a possible VAT  refund like the T's & C's of your contract along with Consumer Law. Have a look yourself and see what you think!!

 

 

 

 

 

 

Edited by VATMAN
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You seem overly concerned about all this VATMAN, would you like to tell us why...do you have a static yourself? Do you feel you’ve been hard done by in some way? What’s your interest in all this??

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31 minutes ago, Vaguely said:

You seem overly concerned about all this VATMAN, would you like to tell us why...do you have a static yourself? Do you feel you’ve been hard done by in some way? What’s your interest in all this??

I am indeed overly concerned because there are tens of thousands of caravan owners who pay annually who quite simply are being ripped off and that is why at the moment I am taking the appropriate action to remedy matters.

 

Yes I am a static owner.

 

If no one is interested or there is any hostility to my aims then please advise and I will refrain from further posts.

Edited by VATMAN
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What you have to realise is that only a fraction of CTs members own a static. It's only recently that we've created a section for static owners.

So don't build your hopes up of people flocking to message you for advice

 

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1 hour ago, VATMAN said:

Have a look yourself at HMRC's rules and seek the advice of VAT Specialists and Tax Lawyers and you will realise on the balance of probabilities, the interpretations of Moore and Smalley are incorrect.

 

Being an independent soul who thrives on solving most of my life's problems quite successfully, there are times, in the past, present and future, when, for many reasons, I would seek expert professional help and advice.

 

Tax and finance is one of them, though I have a good understanding of them and with time could get to grips with whatever nuances and rule changes apply to me at the time, I prefer to leave it to the experts to advise me.

 

I was interested in your statement "............and you will realise on the balance of probabilities, the interpretations of Moore and Smalley are incorrect............" !

 

Should that read "..............and you will realise on the balance of probabilities, the interpretations of Moore and Smalley may be incorrect................"?

 

I await the conclusion of your research to see which way the scales of probability fall and if Moore and Smalley are correct, or incorrect.

 

I think Moore and Smalley have a far greater understanding of tax and contract law than either of us will ever have, look them up.

 

 

 

Edited by Silversurf
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Common sense isn't a gift, it's a punishment because you have to deal with everyone who doesn't have it.  :rolleyes:

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27 minutes ago, Silversurf said:

 

Being an independent soul who thrives on solving most of my life's problems quite successfully, there are times, in the past, present and future, when, for many reasons, I would seek expert professional help and advice.

 

Tax and finance is one of them, though I have a good understanding of them and with time could get to grips with whatever nuances and rule changes apply to me at the time, I prefer to leave it to the experts to advise me.

 

I was interested in your statement "............and you will realise on the balance of probabilities, the interpretations of Moore and Smalley are incorrect............" !

 

Should that read "..............and you will realise on the balance of probabilities, the interpretations of Moore and Smalley may be incorrect................"?

 

I await the conclusion of your research to see which way the scales of probability fall and if Moore and Smalley are correct, or incorrect.

 

I think Moore and Smalley have a far greater understanding of tax and contract law than either of us will ever have, look them up.

 

 

 

Sorry for trying to help.

 

I did not post to get into conflict or argument with anyone so I shall make no further posts.

 

Good luck all

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12 hours ago, VATMAN said:

Sorry for trying to help.

 

I did not post to get into conflict or argument with anyone so I shall make no further posts.

 

Good luck all

That is a shame but I would not let comments from the none static owners put you off, just do not bother letting it annoy you. On a forum you will always get people with different opinions based on their experience/knowledge.

 

Just out of interest, I had a look at the annual invoices for our static and the VAT is listed separately from the fees so the comment that if a total price does not anywhere show VAT it is therefore ok to up prices would not apply to us. 

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13 hours ago, VATMAN said:

Sorry for trying to help.

 

I did not post to get into conflict or argument with anyone so I shall make no further posts.

 

Good luck all


But you are putting forward a proposition and hanging everything on it even though you have been give authentic evidence to prove you are wrong.

 

The facts are that the reduction can be either passed on for the benefit of the end user at a lower price and the seller pays the reduced VAT amount.

 

Or the seller can maintain the previously disclosed VAT inclusive price, pay the reduced VAT and benefit themselves financially from the difference between the two.

 

So by you maintaining that the latter is wrong, that is why you are at odds with other members.

 

It is not conflict or argument, it is others having a different opinion.

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1 hour ago, Paul1957 said:

That is a shame but I would not let comments from the none static owners put you off, just do not bother letting it annoy you. On a forum you will always get people with different opinions based on their experience/knowledge.

 

Though the thread is titled "  VAT refund on annual fees for Static Caravans", the same applies to the many thousands of tourers on seasonal pitches, some having been on the same pitch for a decade or more, therefore is of interest to those folk also.

 

It's not only ' none static owners ' who have put an opposing view, according to their experience,  some static owners have also put their opposing views, which the OP asked for, the fact that others have a different slant on the matter, presenting the facts as they personally see or find them, doesn't require the  PO's  statement of " I did not post to get into conflict or argument. "

 

No poster has got into argument or conflict with the OP, they have simply put forward, clearly and politely, in light of their own experience and knowledge, their ideas, the OP then has the choice of answering the opposing views, if he wishes to discuss that point further, or simply ignoring them.

 

That he suggests that any opposing views to his own is tantamount to conflict or argument is to put it mildly silly, and stomping off at the slightest differences of opinion solves nothing.

 

I don't always agree with Grandpa 😉 but when he says " It is not conflict or argument, it is others having a different opinion. " he's spot on.

Edited by Silversurf
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Common sense isn't a gift, it's a punishment because you have to deal with everyone who doesn't have it.  :rolleyes:

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