Zero-rating for additional items supplied in conjunction with caravan

January 2015

A holiday park operator sold a caravan. Customers were also able to purchase a veranda at the same time which would be bolted onto the caravan. When the veranda was sold separately the appellant always accounted for VAT @ 20 % on the sale of the veranda. However, the appellant contested that the supply of a veranda with a caravan could be zero-rated as a single supply – following the principles laid down in the “Card Protection Plan” judgment.

The First Tier Tribunal had rejected the appellant’s case but the Upper Tier allowed the appeal noting that “there was nothing in Group 9 of Sch 8 to the Act to exclude a veranda from the scope of zero-rating by reason of being part of a single supply of which the principal supply was a caravan”.

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