VALUE ADDED TAX – EXEMPT SUPPLIES – land - facilities for storage or parking of caravans - whether parking for vehicles – yes – exemption excluded. 

LONDON TRIBUNAL CENTRE

	BARRY HOPCRAFT	Appellant

-	and –

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

				Tribunal:	RICHARD BARLOW   (Chairman)
						SUNIL K DAS

Sitting in public in London on 15 March 2004

The Appellant in person

Dr I Hutton instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2004

DECISION

1.	In this appeal Mr Hopcraft appeals against a decision of the commissioners, contained in a letter dated 5 December 2001, that services supplied by a partnership consisting of Mr Hopcraft and his wife trading as Lucky Lite Farm were taxable at the standard rate of VAT and against an assessment in the sum of £35,645.21, notified in a letter dated 8 May 2002, by which tax was assessed for the period from 1 March 1998 until 12 September 2001.  

2.	We are sorry to hear that Mrs Hopcraft died on 12 September 2001.

3.	This decision deals with the issue of liability only because we raised questions about the validity of the assessment, in particular as to how the period from 1 March 1998 to 12 September 2001 was correctly notified as a prescribed accounting period.  Dr Hutton required time to take instructions and although the case was listed for two days and it was concluded on the first day it appeared likely that the commissioners would need time to examine their records to see if any direction had been given and so we decided, with the agreement of both parties, to decide the issue of principle as a preliminary issue and for the appeal to be re-listed for further hearing, if necessary.  It may be that the recently decided case of Hindle –v- Customs and Excise Commissioners [2004] STC 412, which was reported after the hearing of this appeal, will have a bearing on the question that we have left open but we make no holding about that at this stage.

4.	The nature of the appellant’s business, or at least the main part of it, is the storage of caravans while their owners are not using them.  The facts are not in dispute.  The caravans are located in marked bays, in the open, in secure enclosures.  The owners have access via locked gates for which they have security codes and they can have access at any time.  Owners enter into agreements which are specific to a particular bay and which last for a year and most owners renew the agreements for several years.  Mr Hopcraft said seven years was about the average.  Some owners move their caravans out of the appellant’s premises several times each year, others move them only very infrequently.  No-one is allowed to stay in the caravans at the premises and they are not a caravan site within the meaning of that phrase in section 29 of the Caravan Sites and Control of Development Act 1960.  Planning permission for the site is specifically for storage only and occupation would be in breach of a specific condition.

5.	The appellant would not have been liable to register unless the storage charges are taxable and it was agreed between the parties that 1 March 1998 was the correct date for commencement of registration, if the supplies in question are taxable.  Subject to the liability question and the validity question, the quantum of the assessment is not in dispute.

6.	The parties agreed that the supply consisting of the right to store the caravans amounted to the grant of an interest in or right over land or a licence to occupy land within the meaning of the opening words of item 1 of Group 1 to Schedule 9 of the VAT Act 1994, which would make them exempt from VAT.  The issue we have to decide is whether the supplies in question are excluded from exemption by falling within exception (h) to that item which reads:

“(h) the grant of facilities for parking a vehicle,”.

Two questions arise which it is necessary to answer in order to decide the issue. The first is whether caravans are ‘vehicles’ in this context and the second is, if they are vehicles, whether the facilities provided are for ‘parking’.

7.	Before answering those questions we would like to pay tribute to Mr Hopcraft for the exemplary preparation and presentation of his case, which would have been creditable had it been prepared by a City solicitors’ firm, and exceeded by a wide margin what might be expected of a litigant in person. 

Is a caravan a vehicle within the meaning of the exclusion?
 
8.	Exclusion (h) does not define vehicle as such and there is no definition elsewhere in the VAT Act which applies.  Mr Hopcraft drew our attention to several provisions in other Acts where particular types of vehicle are defined, for example, the Vehicle Excise and Registration Act 1994 section 62(1) defines a vehicle as a mechanically propelled vehicle for some of the purposes of that Act and for some purposes of the Road Traffic Acts reference is made to mechanically propelled vehicles adapted or intended for use on roads without defining ‘vehicle’. Mr Hopcraft suggested that those provisions demonstrate that caravans are not vehicles because they are not capable of self propulsion.  It is true that caravans may not be covered by those provisions because they are not self propelled but it does not follow that they are not vehicles for other purposes.  This is firstly because it is not permissible simply to read definitions in one Act across to other unrelated Acts.  Secondly, even if that were permissible, those definitions rely upon assumed prior knowledge of the meaning of the word ‘vehicle’ and merely restrict the application of the legislation to certain types of vehicle.  They therefore tell very little about the meaning of the word except to say that it can encompass something that is mechanically propelled or for use on the roads.  It is however a non sequitur to say that all vehicles must therefore be mechanically propelled or for use on the roads.

9.	Mr Hopcraft also advanced an argument that a caravan is a trailer and therefore not a vehicle or alternatively that it is not a vehicle while it is detached from a towing vehicle, which would be the case while it is stored at his premises.  He cited Rogerson –v- Stephens [1950] 2 All ER 144 in which Lord Goddard CJ heard a case stated from a Magistrate’s Court in which the respondent had been charged with using a motor vehicle and trailer on the road without insurance and had been acquitted.  It was an issue as to whether the information was invalid because, although it was an offence to use a motor car on the road without insurance, it was not an offence to use a trailer without insurance.  Lord Goddard said:

“It is clear that a trailer is not a motor car.  There is also no doubt that a motor car and trailer attached are not one vehicle but two …”.

Although it might be said that that is authority for the proposition that a trailer is or can be a vehicle Mr Hopcraft relied upon that passage for the different proposition that a trailer is only a vehicle while it is attached to a motor car.  We consider that to be an incorrect reading of Lord Goddard’s words.  He was considering the validity of the charge laid against the respondent in that case and the charge referred to a motor car and trailer but the legislation only referred to motor cars, so the charge was invalid because the trailer was not a motor car not because it was only a vehicle while it was attached to a motor car.  The second sentence quoted above merely states the fairly obvious point that a trailer does not become a motor car by being attached to a motor car but that it retains its character as a separate vehicle, which was relevant to the validity of the charge as laid.  That case is therefore authority for the proposition that a trailer is a vehicle.  It might be said that what was being considered there was a trailer in the ordinary sense and that a caravan is so different form an ordinary trailer that the case says nothing about whether a caravan is a vehicle but we certainly do not agree that it establishes that a trailer ceases to be a vehicle when it is detached from its towing vehicle.
    
10.	In Garner –v- Burr [1950] 2 KB 683 Lord Goddard CJ had to decide if a poultry shed with wheels was a trailer “while being drawn along the road” (at page 684C).  Mr Hopcraft relied upon this case as support for the same proposition.  However section 1 of the Road Traffic Act 1930, which was being construed, refers to “vehicles (in this Act referred to as ‘trailers’) drawn by motor vehicles”.  Lord Goddard held that although a vehicle is “according to the dictionary definition … primarily a means of conveyance provided with wheels or runners and used for carriage of persons or goods and also a receptacle in which anything is placed in order to be moved … the Act of 1930 is aimed at anything which will run on wheels and is being drawn by a tractor or other motor vehicle …”.  His extended definition therefore does depend in part at least upon the fact that the trailer was attached to a motor vehicle and that it might not otherwise have itself been regarded as a vehicle but that was because of his having read the Act as aimed at anything with wheels being towed by a motor vehicle on a road.  That case was therefore decided on the particular Act under consideration.  It does also show that the Lord Chief Justice was prepared to have regard to the dictionary definition.  

11.	Mr Hopcraft referred to Newberry –v- Simmonds [1961] 2 All ER 318 and Smart –v- Allan [1962] 3 All ER 893 in both of which the Divisional Court considered whether motor cars had ceased to be mechanically propelled vehicles and he pointed out that as a caravan does not have an engine it can never be a mechanically propelled vehicle (which is true) but we do not agree with his further proposition that it cannot therefore be a vehicle at all or that it is only a vehicle when it is attached to a motorised vehicle.  Those cases simply do not deal with those points.

12.	Mr Hopcraft referred to four tribunal cases.  In Mr and Mrs Warner (case number 2409) the tribunal held that the winter storage of caravans was not, on the facts of the case, a licence to occupy land because no particular piece of land was allocated, whether that decision would now be correct is not relevant to this appeal.  However, the tribunal also expressed a tentative opinion that the exception to exemption for parking vehicles would not have applied, had it been necessary to decide that issue.  The relevant part of the decision reads:

“But I incline to the view that a caravan does not answer the description ‘vehicle’ being designed principally for living in and not for carrying persons or goods.”

That case therefore does not deal at all with the question whether winter storage is parking because the tribunal found it to be irrelevant both because there was no licence to occupy land and because the caravans were probably not vehicles.  On the other hand the tribunal’s reference to the issue whether a caravan is a vehicle was not conclusive. 

In A E House & Son (case number 2620) the tribunal specifically held, when deciding the issue about winter storage, that caravans are not vehicles within the meaning of the exception to the exemption.  The fact that caravans are mentioned in two other places within the Group but are not mentioned in the exception was held to be a reinforcement of the tribunal’s decision that caravans are not vehicles because they are “intended to be lived in and not travelled in, and not primarily a means of transporting any chattels, [and are not vehicles]”.

In D H Commercials (case number 14115) the tribunal held that a caravan is a vehicle relying both on the dictionary definitions of the word in the Collins English Dictionary and the Oxford Dictionary and on the judgments in Garner –v Burr in which the tribunal noted that anything which runs on wheels and is drawn by a motor vehicle was held to be a trailer and on Rogerson –v- Stephens in which it was held that a trailer is a vehicle. 

The D H Commercials case was followed in A and A Newall (case number 18074).

13.	It is unfortunate that there is a difference of opinion within the tribunal decisions about whether caravans are vehicles but we find the dictionary citations and the two Divisional Court cases to be compelling arguments in favour of a conclusion that caravans are vehicles.  We would also point out that when Lord Goddard referred to the dictionary definition of a vehicle as being “primarily” a means of conveyance of goods or people we take that to mean that vehicles are usually of that sort, not as the tribunal seems to have thought in the A E House case, that all vehicles must have that as their primary purpose.  Some vehicles may have other primary purposes without ceasing to be vehicles and, given that the dictionaries state that caravans are vehicles, caravans are an example of vehicles which have a purpose other than conveying goods or persons.  The dictionaries reflect the normal meaning of words and we hold that caravans are vehicles in the normal meaning of the word, though they are vehicles with special and uncharacteristic uses compared with the generality of vehicles.

Are the caravans “parked”?

14.	Mr Hopcraft also argued that, even if caravans are vehicles, the provision of storage facilities at which the caravans are not occupied is not ‘parking’.  He pointed out that when the caravans are stored for the winter the ordinary wheels are sometimes removed and that some owners leave their caravans for lengthy periods without moving them.  He also pointed out that Customs and Excise accept that where motor vehicles are stored as part of a trader’s stock in trade they are not regarded as parked.  Mr Hopcraft drew a distinction between storage and parking and contended that his activities amounted to storage.  He pointed out that in paragraph 24 of the decision in the Newall case the tribunal appears to have accepted that there is a distinction between parking and storage.  That is indeed so but the tribunal did not give any guidance about how the distinction would be made.

15.	“Parking” is not defined in Schedule 9 of the VAT Act and our interpretation of the word, giving it its ordinary meaning, is that it is the provision of a place where vehicles can be positioned when not in use.  It is true that storage of vehicles could fall within that definition as well but we consider and hold that the distinction between storage and parking is that vehicles are parked when they are placed in a position where they can readily be recovered by their owners for use at short notice, whereas storage means that they are placed in a position where they can be said to have been put away because they will not be required at short notice.  We do not regard this as principally a question of the length of time for which the vehicle is parked or stored or the frequency with which it is recovered from the place where it is stored or parked.  Something can be stored for a short time or parked for a long time.  The distinction is that in the case of parking the vehicle is reasonably readily available if the owner does decide he wants to use it, however frequently or infrequently he chooses to do so.  

16.	The appellant’s supplies clearly fall within that definition of parking on the facts of this case.  The fact that some owners seldom move their caravans is irrelevant.  If they wished to do so they could move them at any time.  They have direct access to the compound at any time and can remove their caravans whenever they wish.

Conclusion.

17.	We accordingly determine the preliminary issues in the commissioners’ favour.  The relevant supplies are taxable and the appellant is liable to be registered.      

18.	We make no order for costs at this stage. 

RICHARD BARLOW
CHAIRMAN

RELEASED:

LON/01/1325
LON/02/0459