Mobile Caravan

Accounting
1

I will apologise in advance if certain community members feel that this should be in another category or that this community shouldn’t be used for advice, as it appears to crop up on a lot of threads.

I own and operate an incorporated security company and the majority of our adhoc static guarding is on remote sites where we have to provide welfare facilities (literally installations in the middle of a field otherwise totally unmanned).

Fortunately the need for guarding is rare and thus most of the time we have just one guard on any of our sites at any one time, and I was looking to purchase a mobile caravan as an alternative to paying £400 plus a week for a hired in welfare unit.

I am looking at a relatively inexpensive caravan £14k plus VAT new which is more than big enough but also will only lose £4-5k in value over 4 years, which seems pretty good considering the money it will save on welfare unit hire (of course we will incur charges for a generator, toiler emptying etc. as well and cleaning etc.) but overall it’s a huge cost saving and also gives us the flexibility to have it onsite in the middle of the night rather than waiting 24-48hrs.

My accountant is next to useless at this time (uncommunicative/unavailable) and thus I am looking for an alternative, and having tried to speak to HMRC it is clear that very few people their end know what’s what and just want to fob me off back to a tax adviser/accountant or their website.

Unfortunately the model I am looking to buy is rare and I need to buy it in the next couple of days, otherwise it will be sold and the next one available is in June (if buying new).

My understanding of this purchase is that as it would be wholly and exclusively for the business, it would be deductable from the company profits/corporation tax liability and the full VAT amount could also be claimed. If purchased new it would also qualify for the AIA/130% super allowance currently available.

Is anyone able to confirm that I am correct in my thinking?

Taking this further, my understanding of things is that if for some reason one of the staff decided to use the caravan for personal use there will be issues with all of the above which I would like to avoid.

As I am sure someone at some stage will think they can use it for their own purposes in between jobs (it will be moving around all over the UK potentially), if I made it available for short term rental by members of staff when it isn’t required for jobs, how does this affect everything I have described above in terms of corporation tax and VAT etc.?

Thank you. And yes of course I know not to rely on anyone’s advice on here etc. etc.

2

Hello @Normski

I am sorry I could not give a definitive answer on this as I am not and accountant nor bookkeeper.

Other forum members may comment but as you say “You know not to rely on anyone’s advice on here”.

I did find the below on HMRC’s website

If you are having trouble with your accountant, we have a panel of accountants to choose from, for more information, please see the following link:

3

Capital allowances for “structures” are complicated and there is not necessarily a definitive answer. You really do need to speak to your accountant and ask him to seek specialist advice if he doesn’t have the experience. You could also speak to a tax specialist.

The question is whether or not the caravan can be viewed as “plant” as only plant and machinery, not “buildings or structures” qualify for capital allowances.

This section is from the capital allowances manual “ Usually, business premises or setting are not ‘plant’. It is necessary to distinguish between the place ‘in which’ or ‘on which’ the business is carried on (premises or setting and not plant) and the apparatus ‘with which’ the business is carried on (might be plant).”

There is a special section on caravans, though, CA22100. It doesn’t specifically mention a case like yours but is worth a read. This is the link: CA22100 - Capital Allowances Manual - HMRC internal manual - GOV.UK

Sorry I can’t give you a definitive answer but as I said, CAs can be complicated especially in the case of “structures” and I’m not a specialist.

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try asking on https://www.accountingweb.co.uk/ or search in their AnyAnswers community discussions pages.

5

Thank you for all of the valuable contributions.

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You can try but I wouldn’t necessarily trust the answers from there either! As I said, it’s complicated so you really are best seeking advice from a tax adviser directly or trying again with HMRC.

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