Annex 1: Minor Changes in the Law Change 4: Trading and property income: caravan sites where trade carried on: sections 43 and 213
This change gives statutory effect to ESC C36 (caravan sites where there is both trading and letting income).
It brings the income tax and corporation tax codes back into line.
ESC C36 states:
In practice there is an element of trade, such as the operation of a site shop or the provision of leisure facilities such as a café, included in the operation of most caravan sites.
This change gives a company which meets the qualifying conditions a statutory right to treat receipts from letting caravans or pitches as receipts of the trade of operating a caravan site. So trading losses (including those brought forward) may be available against the caravan site receipts.
This change is in taxpayers’ favour in principle. But it is expected to have no practical effect as it is in line with generally accepted practice.