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  Disability Help Scotland - VAT Exemption  

VAT Exemption on Goods & Services

Disabled people are exempt from paying VAT when buying equipment, which is designed or adapted, to help with daily living. To qualify for this exemption the equipment must be intended for use by disabled people and must relate to their disability. Goods designed to be used by both disabled and non-disabled people do not qualify for zero rating and VAT relief is not available on goods that have already been purchased.

Items that may fall into this category are: hoists and lifts, adjustable beds, stair lifts and adapted vehicles. In most cases they must be designed or permanently adapted for use by a disabled person and must be for domestic use.

There is no VAT payable on the costs of servicing or maintaining disability equipment, so check whether you can receive this VAT exemption before buying or ordering equipment. Services that are supplied zero-rated include the installation of zero-rated goods, the adaptation of general items for use by a disabled person and some building alterations.

The construction of ramps, doorways, passages, bathrooms and lifts are usually zero-rated as is work to prepare and to make good. Adaptations of bedrooms and kitchens are not exempt, but items for these rooms may be.
The supplier must be registered for VAT and the supplier declaring that you have a chronic illness or disability must receive a declaration form.

VAT Relief on Cars

Buying a new car free of VAT can save a significant amount of money eg £1,500 on a £10,000 car. There are specific rules governing the extent of the driver's disability and the use to which the car is put. The vehicle must be designed or adapted before purchase, so that at least one disabled person can drive or travel in it, who would normally use a wheelchair. The car must be for domestic or personal use. All modifications must be included on the main invoice and VAT exemption cannot be claimed after the purchase has been made.

For the purposes of VAT relief, a wheelchair user is anyone who uses a wheelchair in order to be mobile. This does not include people who use a wheelchair occasionally, for example, when shopping or visiting, or someone who is using a wheelchair on a temporary basis. Similarly, people who use mobility scooters are not considered to be wheelchair users.

Adaptations include: a swivel seat, hoist, box for the wheelchair fitted to the top or the back of the vehicle, hand controls, push/pull brake and accelerator or infra-red units that operate the secondary controls. Adaptations such as the fitting of a roof rack, attachment of a trailer or automatic transmission do not make the vehicle eligible for VAT relief.

There is no VAT relief on vehicles purchased by disabled people who are not wheelchair users, on un-adapted vehicles used by disabled people that are adapted later or vehicles used for commercial purposes.

Disabled people who have vehicles at the zero rate can use their vehicle in their work where it is incidental to their private use, but not where it is used for a business.

The repair and maintenance of an adapted vehicle, which qualified for VAT relief when purchased, are zero-rated. Repairs and maintenance on vehicles adapted before 1 April 2001 are eligible if the vehicle was purchased VAT zero-rated under previous legislation.
If the vehicle was adapted after it was supplied to a disabled person, only repair and maintenance of the adaptations are eligible for VAT relief. The standard rate of VAT is payable on all other repairs and maintenance.

How to get the declaration form

The declaration form can be provided by the supplier or can be found in leaflet VAT Relief's for People with Disabilities.

There are examples of declaration forms at the back of the leaflet.

The form is completed by or on behalf of the disabled person and given to the supplier who keeps it for his/her VAT returns. You do not have to be registered as disabled to claim this exemption.

Copies of the leaflet and further advice is available from the National VAT Advice Service on 0845 010 9000 text phone 0845 000 0200.


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