VAT Relief for Disabled People

VAT relief is available on a range of goods and services for disabled people, allowing eligible items to be supplied at the zero rate (no VAT charged). This relief covers adapted vehicles, mobility aids, medical appliances, home adaptations, and equipment designed solely for d...

Introduction

Who Qualifies for VAT Relief

Eligible Customers

You can supply goods and services at the zero rate of VAT to:

Disabled people buying for their personal or domestic use
Charities that make goods available to disabled people for their personal or domestic use

Definition of 'Chronically Sick or Disabled'

A person qualifies as 'chronically sick or disabled' if they have either:

A physical or mental impairment which has a long-term and substantial adverse effect on their ability to carry out everyday activities
A condition which the medical profession treats as a chronic sickness, such as diabetes

The relief does not extend to:

Elderly people who are not disabled or chronically sick
People who are only temporarily disabled or incapacitated, such as someone with a broken limb

When a parent, spouse or guardian acts on behalf of a disabled person, the supply is treated as being made to that disabled person.

The relief is not means-tested. It does not depend on what benefits a disabled person receives, and a person does not need to be registered as disabled to qualify.

Conditions for Zero Rating

All of the following conditions must be met before you can zero rate a supply:

1. The customer is eligible (disabled person or qualifying charity)

2. The goods are for the personal or domestic use of the disabled person

3. The goods or services are on the list of items eligible for zero rating

As the supplier, you are responsible for checking that your customer meets all the conditions for zero rating. You should take reasonable steps to verify eligibility.

Adapted Motor Vehicles for Wheelchair Users

Qualifying Vehicles

Zero-rated VAT applies to motor vehicles that meet all these criteria:

The vehicle seats no more than 12 people including the driver
It is supplied to a disabled person who normally uses a wheelchair or stretcher to be mobile
The vehicle is designed or substantially and permanently adapted to enable the wheelchair or stretcher user to travel in it
The adaptation is necessary to enable that person to travel in the vehicle
The vehicle is for the domestic or personal use of the wheelchair or stretcher user

Who Counts as a Wheelchair User

For VAT relief purposes, a wheelchair user is any disabled person who normally uses a wheelchair (electrically powered or otherwise) to be mobile.

This can include people who do not use their wheelchair all the time, such as:

A disabled person with a degenerative condition (such as multiple sclerosis) who uses a wheelchair only when their condition requires it
A lower limb amputee

A person who only occasionally uses a wheelchair (for example, when visiting a shopping centre) or temporarily uses one (such as with a broken leg) does not qualify.

Important: Mobility scooter users do not qualify for this relief. A mobility scooter is not a wheelchair for VAT purposes.

Three-Year Rule

From 1 April 2017, an eligible individual can only purchase one qualifying adapted vehicle under the relief every three years, unless an approved exception applies.

Declaration Requirements

From 1 April 2017, customer eligibility declaration forms are mandatory. The disabled person (or their representative) must complete a declaration form, and suppliers must:

Obtain the completed declaration before zero rating the supply
Keep the declaration and relevant documents to demonstrate eligibility
Provide certain information to HMRC

If you charge VAT incorrectly, you must adjust your VAT records and refund the VAT to your customer. HMRC cannot make refunds directly to customers.

Other Zero-Rated Goods and Services

Medical and Surgical Appliances

Medical and surgical appliances designed solely for use by disabled people can be zero-rated when supplied to eligible customers.

Specialist Equipment

Zero rating applies to:

Electrically or mechanically adjustable beds
Chair lifts and stair lifts
Hoists
Specialist sanitary devices
Low vision aids
Mobility scooters (when supplied to disabled people, though users do not qualify for adapted vehicle relief)
Hydrotherapy pools
Equipment and appliances designed solely for use by disabled people

Computer Devices and Assistive Technology

Specialist computer devices that form part of an assistive technology system can be zero-rated when supplied to eligible disabled customers.

Parts and Accessories

Parts and accessories for qualifying goods can also be zero-rated.

Services That Can Be Zero-Rated

Installation, Repair and Maintenance

The following services qualify for zero rating when provided for eligible goods:

Installation of qualifying goods
Repair and maintenance of qualifying goods
Adaptation of goods for use by disabled people

Building Works

Zero rating applies to certain construction services in the homes of disabled people, including:

Installing ramps, widening doorways and passages
Adapting or installing bathrooms, washrooms and lavatories
Installing, repairing and maintaining lifts
Preparatory work, restoration work and making good in connection with these services
Goods supplied in connection with these construction services
Grant-funded building work for disabled people

Emergency Alarm Call Systems

Emergency alarm call systems supplied to and installed in the homes of disabled people can be zero-rated.

Supplies to Charities

You cannot zero rate all goods and services to all charities. Take extra care in checking that a charity is eligible for VAT relief before zero rating your supply.

Supplies to charities only qualify for VAT relief when the goods are made available by the charity to a disabled person for their personal or domestic use.

For adapted motor vehicles, charities can receive zero-rated supplies of qualifying vehicles (that carry no more than 12 people including the driver) that are designed or substantially and permanently adapted to enable a disabled person to travel in them.

Supplier Responsibilities

Your Decision-Making Role

As a supplier, you are responsible for deciding whether goods or services qualify for zero rating. You must check that your customer meets all the conditions.

If you are unsure whether equipment or an appliance is designed solely for use by disabled people, you can request written confirmation of the designer's intention or the design specification from the manufacturer.

HMRC will not ordinarily provide binding VAT rulings to retailers or distributors on the eligibility of specific items for VAT relief.

How Zero Rating Works

Zero rating works by the supplier not charging VAT. There is no VAT refund system, and HMRC cannot refund VAT directly to customers.

If you charge VAT incorrectly, make an adjustment to your VAT records and refund the VAT to your customer.

Adaptations for Non-Wheelchair Users

Disabled individuals who are not wheelchair users can still receive zero-rated VAT on the cost of adaptations made to motor vehicles to suit their individual needs. The vehicle itself would be subject to standard rate VAT, but the adaptation work qualifies for the zero rate.

Sources

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.