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bigduckontax
bigduckontax, Accountant
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I have a client who has just purchased a caravan. He works

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I have a client who has just purchased a caravan. He works in the contruction industry and moves from building site to building site. A lot of the places he works are remote so the caravan will be used to holding meetings in with other people working on site, meet suppliers, be used for facilities and for a small amount of storage. What is the correct tax treatment of this? Can it be clamied as Plant and Machinery with AIA?
Submitted: 10 months ago.
Category: Tax
Expert:  bigduckontax replied 10 months ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Many years ago I had a client who assisted his wife's florist business. He bought a camper van for this and the Inland Revenue classed this as a van! I recently commented upon this to a colleague and he told me that this is no long allowed; I was not surprised! Here is the advice from Accounting web: 'Caravans occupying holiday sites are treated as plant and machinery qualifying for capital allowances, even if they are on hard standings and not required to be moved.' Unfortunately your usage does not comply with this so it cannot be claimed as plant and machinery. Here is more information from the same site: '“Entitlement to plant and machinery capital allowances on furniture, furnishings, etc. in the let property, as well as on plant and machinery used outside the property (such as vans and tools); but there are no capital allowances for the cost of the property itself or the land on which it stands;” I spoke to HMRC to check the situation and they said that this is the overriding rule and therefore there are no capital allowances available for the cost of the property itself even if it is a caravan.' So this cost cannot be set as an AIA. I am so sorry to have to rain on your parade.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3364
Experience: FCCA FCMA CGMA ACIS
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Customer: replied 10 months ago.
Hi KeithThank you for your very quick response. I thought that would be the case, I will explain this to the client. I'm not sure how they will take it but rules are rules.Best regardsJack
Expert:  bigduckontax replied 10 months ago.
Yes, Jack, you could have knocked me down with a feather when the Inland Revenue allowed it as a van instead of a car so many years ago! Thank you for your support.

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