you or your friend are bringing a caravan big enough to site to replace a small flat (a static type?), charging rent and seem to envisage a new dwelling unit fairly independent of the main building.
There are other threads with good advise on caravan in gardens propostions please search for "caravan garden" but my interpretation of the best of these say is that your proposal would not be exempted by the caravan act nor in planning ancillary to the main dwelling and allowable in planning terms, renting the caravan out is a pretty clear indicator its essentially seperate. Planning will become involved, council tax could take an interest at any point and tenants rights might be created.
In planning a great deal will turn on the caravans actual links to the main residence, substantial shared links and use will make the caravan ancillary accomodation (and allowable), with actual independence inidcating a new dwelling needing planning. The possibility that most caravans have of entirely seperate use may arise in discussion but actual use would be the relevant point.
You have to link a lot to the main property, services, bills, use of the house, a contrbution to overall house bills would be better than rent for the caravan.
