Can I Buy a Touring Caravan Through My Business?

Nov 14, 2025

Thinking of buying a touring caravan through your business? The short answer: yes—but only if it’s mainly for work! From client meet-ups under Caravan Awnings to mobile offices on wheels, this guide uncovers the tax perks, HMRC rules, and clever ways to make your business trips feel like mini holidays.

Legal Feasibility and HMRC's Use Test

It Must Be Used Solely for Business Purposes (The primary rule for maximum tax relief)

To qualify for full tax relief, the caravan must be used primarily for business. This means it should serve company purposes such as client meetings, mobile offices, or staff accommodation during work trips. HMRC will only approve relief when you can prove its business role. That proof comes from records—so keep detailed logs and documents from the start.

Grey and black inflatable caravan awning with open door attached to a caravan on a grassy field with trees in the background.

Legitimate Business Uses (e.g., Mobile office at sites, accommodation for travelling employees, mobile trade show/marketing)

A caravan can be justified for several genuine business activities. It can act as a mobile office for on-site projects, a temporary home for travelling staff, or a hospitality hub for clients at trade events. Under Caravan Awnings, it can create a welcoming space to host meetings or display products. These uses demonstrate its professional purpose rather than personal leisure.

The Risk of Private Use (Any significant personal use immediately complicates tax claims)

Private use is where problems begin. Even limited personal trips can lead to Benefit-in-Kind (BIK) issues and invalidate deductions. To stay compliant, keep private and business use entirely separate. Accurate records of who uses the caravan and when are key to staying on the right side of HMRC.

Maximising Tax Benefits: Capital Allowances and VAT

Capital Allowances on the Purchase Price

Qualification Test: Is the Caravan "Plant and Machinery?" (It must be regularly moved and not permanently fixed to qualify)

A touring caravan may count as plant and machinery if it’s mobile and forms part of day-to-day business operations. If it travels between locations for meetings, site work, or staff stays, it can usually qualify. Fixed or semi-permanent caravans, however, rarely meet this test. The more the caravan moves for business, the stronger your case.

Annual Investment Allowance (AIA) vs. Writing Down Allowances (WDA) (The different rates based on how the asset is classified)

If your caravan qualifies, you can claim tax relief in two main ways. The AIA allows up to 100% deduction in the year of purchase (within the annual limit). Alternatively, WDA lets you write off a percentage of the cost each year. Your accountant can help decide which method best fits your company’s wider capital plan.

The Farmer's Exception (Highlighting the unique rule for caravans used to house farm employees)

There’s a specific exception for farms. Caravans used to house agricultural workers can receive special treatment under capital allowances. This rule recognises that such use is directly tied to business operations. As always, documentation is essential to justify the claim.

Grey and black inflatable caravan awning with one open panel attached to a white caravan on a grassy field surrounded by trees.

VAT Recovery on Purchase and Running Costs

The 100% Business Use Rule (Strict requirement to reclaim VAT on the purchase price)

If your business is VAT-registered, you may be able to reclaim VAT on the purchase.
However, HMRC insists on 100% business use—even occasional personal use can disqualify your claim. The caravan should be owned, stored, and used strictly for company activities. Keep clear proof, such as logs and invoices, to demonstrate compliance.

Reclaiming VAT on Running Costs (Insurance, repairs, storage, and fuel used for business travel)

VAT recovery doesn’t stop at the purchase. You can also reclaim VAT on insurance, repairs, fuel, and storage—provided these expenses relate to business use. Keep itemised receipts and mileage logs for each trip. Small details matter when it comes to proving business intent.

The Tax Danger Zone: Benefit-in-Kind (BIK) and Running Costs

Understanding Benefit-in-Kind (BIK) Tax

The "Asset Made Available" Rule (The charge is based on availability, not just actual use)

HMRC looks not only at whether the caravan was used privately, but whether it was available for personal use. Even if nobody actually took it on holiday, simply having access can trigger a BIK charge. Restricting personal use through clear policies helps reduce the risk. It’s best to store the caravan securely and limit access to work purposes only.

Calculating the BIK Charge (Generally based on 20% of the market value of the asset)

If HMRC decides the caravan provided a private benefit, the BIK charge is generally calculated at about 20% of its market value. This can raise both company and personal tax liabilities. The exact figure depends on usage records and whether the business can prove genuine work-related use. Accurate evidence can make a big difference here.

Paying for Private Use (How employee contributions can reduce the BIK charge)

If employees or directors make a financial contribution toward any private use, that amount can offset the taxable benefit. This must be properly recorded in payroll and accounting systems. Consistent documentation of payments keeps HMRC satisfied.
It also shows that the company has managed the benefit fairly.

General Financial and Legal Compliance

Commercial Insurance Necessity (The need for business-grade insurance that covers the intended use and employees)

Always ensure you have commercial insurance that matches the caravan’s role. A regular leisure policy won’t provide adequate cover for business activities. This insurance should protect the vehicle, your employees, and any clients involved. Failing to arrange the correct policy can cause costly issues later.

Record Keeping (Maintaining a rigorous log of business travel and usage to justify claims)

Keep a detailed logbook of all business journeys, maintenance, and costs. Mileage, dates, and trip purposes must be noted. Good records back up your tax claims and make audits straightforward. Aim to store these records for at least six years in case HMRC requests evidence.

The Importance of a Specialist Accountant (Avoiding potential HMRC scrutiny and penalties)

Finally, it pays to have a specialist accountant who understands vehicle purchases through limited companies. They can guide you on compliance, handle capital allowance claims, and spot potential issues early. This professional advice can save time, stress, and unexpected penalties. With proper planning and documentation, a caravan can be a rewarding investment for your business.

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Phil McEleney

Get to know me

Started CamperNation to make buying caravan and glamping gear feel simple, honest, and stress-free. Now helps customers daily with awnings, power solutions and outdoor setups. Usually found talking canvas, campsites, and why the kettle is the most important piece of kit.

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