From time to time, we are asked for clarification on the rules regarding VAT exemption, and it seems that there may be many people missing out on buying products without VAT, because they don’t realise that they can.
Download a blank claim form here
There is a different scheme for people aged over 60, who aren’t classified as disabled. In this situation, you can have mobility aids installed at home with a reduced rate of VAT – 5%. There are more details here
Click here to go down to VAT rules about adapting vehicles
Disability or long-term illness makes some purchases free from VAT
If you are disabled or have a long-term illness, then you are eligible for buying some products without VAT for your own personal, domestic use. You aren’t eligible if you are elderly, frail but otherwise not disabled, and equally, you can’t claim if you have a temporary condition, such as a broken leg. It isn’t possible to claim exemption if you are buying for a number of people (for example, in a residential home), but you can claim if you are buying on behalf of someone else who meets the criteria, such as a parent buying products for the use of a child with a disability or someone buying for their partner. Charities may also be able to claim VAT exemption, when buying products that will be made available to a disabled person.
Products must be designed solely for use by disabled people
The other part of the equation is what type of products can be bought without VAT? The general rule is that products which are “designed for use solely by disabled people” can be exempt. Some building works to adapt property to meet the needs of the disabled occupant also qualify. Sometimes, it is quite clear that the product should be exempt: a wheelchair or access ramp, a hoist or converted car. But sometimes, it isn’t so obvious, and in these circumstances it is for the manufacturer to satisfy HMRC that their products are eligible for relief.
How do you make your purchase VAT exempt?
How do you get the products without paying VAT? You have to claim before you pay, and the supplier will then deduct the VAT from the price they charge you. Usually, this is done by completing and signing a form which states that you are eligible. Quite straightforward if you are buying from an online retailer or from a specialist mobility supplier, who are well used to guiding their customers on this subject. It is rather less easy in High Street stores, such as Boots, Argos and other large chains, who have to be sure that they are only supplying the correct products free of VAT to the appropriate customers – because HMRC puts this responsibility on them – when HMRC “won’t ordinarily provide a binding VAT ruling to a retailer or distributor on the eligibility of specific items for VAT relief”. When businesses can’t rely on the authorities to give them reliable guidance, it is not surprising that they tend to err on the side of caution, and certainly don’t seem to publicise the scheme. Little wonder that, as one of my correspondents said on the subject: “this is one of the best kept secrets in the country”.
Why so complicated?
One may well question the whole situation, where other VAT exempt goods are simply presented as such. Children’s clothes, books, educational materials, even, apparently, working dog food are all sold without VAT, and no-one has to prove their status to buy. How hard would it be to provide some straightforward guidance for retailers about which items were exempt, and then allow them to be sold to anyone, without people having to go through the procedure of asking for exemption and proving that they are entitled? I can’t really imagine that there would be a stampede of able-bodied people trying to buy zero-rated walking frames.
Repairs and servicing also eligible…
Don’t forget that product repairs are eligible for VAT exemption to the same extent as the original equipment. So, if your rise and recliner, mobility scooter or adjustable bed needs attention, and you meet the criteria for claiming exemption, make sure you do so!
Sometimes, suppliers are not sure about the procedure, and may not have the necessary form for you to complete. No need to worry, you can download a blank form here
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VAT treatment of adapted vehicles
This year, 2017, the rules about buying a vehicle free from VAT have been changed.
There is a limit of one vehicle purchase every three years.
For regular wheelchair users, there is zero-rate VAT on the supply of a vehicle that has been designed for a wheelchair user to travel in it, or has been substantially and permanently adapted in order for a wheelchair user to travel in it.
If only minor alterations are required to enable a wheelchair user to enter or drive a vehicle, then the vehicle wouldn’t be exempt, though the alterations would be.
It is possible for someone else to be nominated to purchase a wheelchair accessible vehicle free from VAT on behalf of the disabled wheelchair user. The vehicle must be primarily for the domestic and private use of the disabled person, and the person buying it must have a close relationship with them, such as partner, parent, child or carer, and live nearby.
People who use mobility scooters, or who only use a wheelchair occasionally or on a short-term basis, do not qualify for the VAT exemption on purchasing a vehicle.
For anyone who is disabled, but not generally a wheelchair user, the supply and fitting of adapted driving controls is exempt from VAT – but not the vehicle itself.
A declaration must be completed at the time of the purchase, and provided to HMRC by the seller.
There is a penalty for making a false declaration of eligibility.