What Is VAT Relief?

There are over 10 million disabled people with half of which are over 65 years of age in the UK. Today the disability equipment market is worth £1.4 billion a year which has increased by a massive pace of 92% in the last 10 years. Most disabled people rely on certain equipment’s and daily living aids to make their life a little easier. These equipment’s being quite expensive cannot be afforded by a huge percentage of people.

To ease the burden of purchasing such costly essential items for these disabled people, Her Majesty’s Revenue and Customs (HM Revenue and Customs or HMRC) i.e. a Non-Ministerial Department of the UK Government allows people with long term chronical illnesses or disabilities to purchase items without having to pay 20% VAT.

Who Qualifies For VAT Relief?

  • People who are chronically sick
  • People who are permanently disabled
  • People who are terminally ill
  • People who have a physical or mental impairment which has long term sustainable adverse effect upon their ability to carry out everyday activities

What Products Are VAT Exempt?

With thousands of daily living aid products out there, some products qualify for VAT exemption, some products do not. Prior to purchasing it is important to check with the retailer. Following are some of the products and services on which disabled people can claim VAT relief on:

  • Medical and surgical appliance
  • Mechanically or Electrically adjustable chairs
  • Mechanically or Electrically adjustable beds
  • Mobility scooters
  • Mechanically or Electrically adjustable stair lifts, hoists, and lifters
  • Low vision aids
  • Wheelchairs
  • Bathrooms
  • Alarms
  • Sanitary devices
  • Parts and Accessories
  • Building work; ramps, doorways, etc.
  • Low vision aids
  • Motor vehicles
  • Equipment designed solely for disabled people

Frequently Asked Questions

Without a doubt, the VAT exemption can be quite confusing. To try and work through the maze of VAT exemption, we’ve put together some of the most common FAQ’s that can help you clear the confusion from each party involved in the process.

User

How to Get the Product VAT free?

For VAT relief, a person can get the product VAT free if they are disabled or have a long-term illness or if they are impaired physically or mentally which affects their ability to carry out their day to day activity.

To claim the product VAT free, you must claim before you pay, and the supplier will then deduct the VAT from the price they charge you. Generally, the process is done by completing and signing a form stating eligibility.

If you order any product online, you can register for and claim VAT Relief while going through the check-out process. In case, if you do not prefer to claim VAT Relief online, you can also register and claim by completing the VAT declaration form that site.

Who Qualifies for VAT Relief?

You’re eligible for the VAT relief if you have one of the following conditions:

  • Terminally ill
  • Suffering from Chronical disease
  • Permanent disability
  • Physical or mental impairment affecting the ability to carry out everyday activities

What Medical Conditions Qualify for VAT Exemption?

You qualify for VAT exemption if you are suffering from the following medical conditions: –

  • Deafness.
  • Heart Disease.
  • Cardiovascular Disease.
  • Arthritis.
  • Blind.
  • Parkinson’s Disease
  • Motor Neuron Disease
  • Parkinson’s Disease
  • Diabetes.
  • Epilepsy.
  • Hypertension.
  • Neurological Diseases.
  • Kidney Disease
  • Multiple Sclerosis
  • Physically Disabled
  • Terminally Ill
  • Other conditions affecting the ability to perform daily activities

What Counts as A Personal Or Domestic Use?

Personal or domestic use means the product or services are used for individual use rather than commercial purposes for e.g. for a group of chronically sick or disabled people in general.

Do I Qualify For VAT-Free Goods?

You will be eligible for VAT free goods or services if you are disabled or chronically ill and the goods are specifically for domestic or personal use. Other than that, you do not need to be registered disabled or eligible for any other benefit to qualify for VAT-free goods.

I Am Registered As Disabled Does It Mean I Can Claim VAT Exemption?

If you are being registered as disabled you can claim on certain products or services that affect your ability to perform your daily activity and are solely for your personal use.

Charity

Can A Charity Claim VAT on Products Purchase?

Organizations who wish to claim charity VAT reliefs should meet the conditions of the definition of charity for tax purposes. For a charity of claim on VAT products it should be: –

  • The charity should be recognized by HMRC
  • Established solely for charitable purposes.
  • Should be registered with the Charity Commission or corresponding regulator.
  • The charity should be based in the UK, another EU member state, Isle of Man, Norway, Iceland or Liechtenstein.
  • Charities claiming VAT relief need to demonstrate recognition of their charitable status by HMRC.

What Type Of Charities Are Eligible For VAT?

For a charity to be eligible for VAT relief they need: –

  • Evidence of being a charity like Charity Commission registration number or a letter of recognition from HM Revenue and Customs (HMRC)
  • A written declaration or ‘certificate’ confirming they meet the conditions for the VAT relief

Can Charities Obtain VAT Reliefs on Their Purchases Of Products Or Services?

There are certain products and services that are zero-rated or reduced-rated when bought by charities, regardless of whether the charities are registered for VAT or not. For the reliefs to made certain conditions are to be met. Charities that are willing to take advantages of this relief must offer their suppliers with eligibility declarations certifying that the certain conditions have been met for that relief.

Does Welfare Services Offering Charities Come Under Non-Commercial Types?

Welfare services are concerned with the provision of health and treatment on the mental and physical health of the elderly or children. Charities that provide welfare services are significantly below cost, to distressed persons for the relief of their distress. This may treat these supplies as non-business and outside the scope of VAT.

Can A Charity Buy Goods From Outside The EC And Claim VAT?

Yes, Charities can claim relief from VAT on some import products into the UK from a place outside the EC.

Retailer & Manufacturer

When Can Supplies Be Zero-Rated?

VAT reliefs for disabled people are not means-tested. Basically, they are dependent on the benefits a disabled person may or may not get. Also, a person does not have to be registered disabled in order to qualify. As a manufacturer, you can only zero-rate supplies to: –

  • Disabled people who are chronically sick or disabled and use the products or supplies solely use for domestic or personal use.
  • Charities that are recognized by HMRC, established solely for charitable purposes, registered with the Charity Commission or corresponding regulator & the charity should be based in the UK, Isle of Man, another EU member state, Iceland, Liechtenstein or Norway.

What Is The Evidence You Should Hold To know that Your Customer Is Eligible for VAT Relief?

HMRC does not supply an ‘exemption certificate’ to the eligible customers but as a Retailer, you should take reasonable steps to check that your customer is eligible to receive your goods or services at the zero rates. It is important that you get a written declaration from each customer confirming that the person is entitled to VAT relief. The declaration should hold enough information to demonstrate that a customer fulfills all the criteria for eligibility.

What Evidence do I need To Take From My Customers?

HMRC requires a signed declaration from retailers, internet and mail order suppliers with other supporting evidence that the supply is made to a disabled person in for customers who buy more than 5 collecting devices, 10 pairs of waterproof underwear, 50 washable pads and 200 disposable pads. Other than a signed declaration you need your customer confirming that the products are being bought by a disabled person for their personal or domestic use

Miscellaneous (Additional Information)

What Are Medical And Surgical Appliances?

A medical or surgical appliance is a device or piece of equipment that’s designed solely for the relief of a severe abnormality or a severe injury.

What Diseases Qualify For VAT Relief?

  • Amputation
  • Rheumatoid or severe osteoarthritis,
  • Severe disfigurement
  • Congenital deformities
  • Organic nervous diseases
  • Learning disabilities blindness.

When Do Retailers Require Evidence?

Retailers require evidence for customers who buy more than: –

  • 200 disposable pads
  • 50 washable pads
  • 5 collecting devices
  • 10 pairs of waterproof or leak-proof underwear

References: –

https://www.gov.uk/guidance/reliefs-from-VAT-for-disabled-and-older-people-notice-7017

Disclaimer: –

The above information contained is provided for informational purposes only and should not be construed as legal advice on any subject matter. You should not act or refrain from acting based on the above content without seeking legal or other professional advice.

All the information on this site contains general information and may not reflect current legal developments or address your situation. We disclaim all liability for actions you take or fail to take based on any content on this site.