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VAT exemptions

HMRC rules re VAT on goods for disabled people

HMRC rules re VAT on goods for disabled people

We are often asked whether we can supply items to charities or for use by registered disabled people without charging VAT. we have taken advice from the HMRC specialist unit that deals with this (on 0845 302 0203) and even though like you we feel this is unfair and would prefer it not to be, the short answer is NO.

Some of our products are specifically designed for use by disabled people and therefore you may qualify for exemption for these. Please contact us if you think this may apply to anything you wish to purchase.

The specific HMRC guidance is given in note 701/7 dated August 2002. This can be found either by typing 701/7 into the search function on the HMRC website or clicking one of the links below.

Notice 701/7 (August 2002) |  VAT reliefs for disabled people

Basically the product in question has to be “designed solely” for use by a disabled person. It is the designer, manufacturer or importer who decides this, and must retain evidence to support this, as explained at 4.5.3 of Notice 701/7. So the fact that a customer is registered disabled or is a school, charity etc is not sufficient to allow us to supply without charging VAT. An example used by HMRC is a walking stick - whereas a wheelchair is clearly "designed solely" for use by a disabled person a walking stick could be used by anyone, disabled or not.

The other question we are frequently asked is whether we can supply to a charity or to someone who is disabled for personal use who signs a certificate. The answer is NO unless the goods themselves are eligible (note the use of the word ALL in 2.1 of Notice 701/7), so if the goods are not eligible then VAT must be charged.